Microsoft on Wednesday said its profits rose 18% for the January-March quarter, driven by its growth in its cloud computing and artificial intelligence business in a turbulent time for the tech sector.

Microsoft Corp. shares jumped after the company reported stronger-than-expected quarterly sales and profit growth, suggesting customer demand for cloud services has held steady despite a wave of tariffs and economic turbulence.

The results are likely to ease concerns about a potential slowdown in AI demand, after some analysts pointed to canceled data center leases at Microsoft as a sign of excess capacity. Rival Alphabet also posted strong results last week,

Meta raised its capital expenditures guidance for 2025 to $64 billion to $72 billion, signaling huge AI investment by Big Tech is still underway.

West Coast tech giants Microsoft and Meta both exceeded analyst forecasts in first-quarter earnings reports Wednesday.

U.S. stocks rallied on Thursday, with the Dow and S&P 500 posting their eighth straight session of gains after strong results from megacaps Microsoft and Meta eased concerns about artificial intelligence spending.