Renowned tech entrepreneur, Peter H. Diamandis, anticipates AI to be a significant driver of earnings growth for Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT).

What Happened: During CNBC's "Last Call" on Thursday, Diamandis stated, "This is the real deal," referring to the role of AI in boosting earnings for Alphabet and Microsoft.

"There are two kinds of companies by 2030: those fully utilizing AI, and those that are out of business," he said.

Diamandis highlighted that in order to succeed in the AI sector, companies would need to look at their resources such as teams, data pool to train AI models, the means to generate revenue from AI and more. He commended Microsoft, Google, Meta, and Elon Musk's X.Ai which are "playing full out" when it comes to utilizing AI.

Why It Matters: Alphabet recently reported a 15% YoY increase in Q1 revenue to $80.539 billion, surpassing the consensus estimate of $78.594 billion. The company's earnings per share also beat analyst estimates, marking the fifth consecutive quarter of such success. Alphabet's AI leadership played a significant role in these results.

Similarly, Microsoft's Q3 revenue increased by 17% YoY to $61.9 billion, beating the consensus estimate of $60.804 billion. The tech giant's earnings per share also exceeded analyst estimates for the fifth consecutive quarter.

Price Action: On Thursday, Alphabet's Class A Common Stock closed at $156.00, with an after-hours price of $174.04. Alphabet's Class C Capital Stock closed at $157.95, with an after-hours price of $176.00. Microsoft Corporation's Common Stock closed at $399.04, with an after-hours price of $416.25.

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