The turbulent market environment on Wall Street continued on Wednesday, with investors taking a little bit more favorable of a tack on their views of the future. After a horrible day on Tuesday, the Nasdaq Composite (^IXIC -0.25%) recovered some lost ground, with the index up more than 1% as of 1 p.m. ET today.

Earnings season is at its peak, and two behemoths on the Nasdaq tech scene gave their latest results. The numbers that Microsoft (MSFT -0.60%) and Alphabet (GOOGL 5.59%) (GOOG 5.33%) shared were informative, and the fact that the two stocks went in opposite directions following their respective reports showed that it's dangerous to treat all tech companies as if they face the exact same set of circumstances. Below, we'll look more closely at what the two tech giants had to say.

Two people looking at a row of cloud-based servers.

Image source: Getty Images.

The cloud is lifting Microsoft

Shares of Microsoft rose nearly 6% on Wednesday afternoon following its late-Tuesday release of its latest quarterly results. The software giant kept getting strong results from its efforts to embrace cloud computing.

Microsoft's numbers for the fiscal third quarter that ended March 31 were solid. Revenue climbed 18% to $49.4 billion, with a 19% year-over-year rise in operating income helping support the company's growth. Adjusted net income rose 13% from year-ago levels, producing adjusted earnings of $2.22 per share.

From a segment perspective, cloud-related businesses did best. The intelligent-cloud segment saw sales rise 26% on a 46% rise in Azure and other cloud-services revenue. Sales of both the commercial and the consumer versions of the Office productivity software suite rose by double-digit percentages during the period. Also helping overall results was a 34% rise in revenue from the LinkedIn business social network.

Best of all, Microsoft continues to be friendly to shareholders, returning $12.4 billion in capital during the quarter through dividends and stock buybacks. That's a trend that Microsoft expects to continue, and the ongoing strength in cloud computing looks unstoppable at present.

Alphabet disappoints despite ongoing growth

Meanwhile, shares of Alphabet dropped about 2% on Wednesday afternoon. The search engine giant has also made big strides into the cloud, but investors are less certain about how much fruit they will bear as a result.

Alphabet's financial numbers were mixed. Revenue continued to show solid growth, rising 23%. Operating income was higher by 30% year over year during the first quarter of 2022. But substantial losses on its portfolio of equity and debt securities caused net income to fall from year-ago levels, with earnings weighing in at $24.62 per share.

CEO Sundar Pichai pointed to the success of Alphabet's efforts to embrace the cloud as a diversifying factor to go along with the Google search business. Yet although Google Cloud revenue jumped 44% year over year, it still represents less than 9% of the company's total sales. By contrast, search represents more than 55% of total revenue, and when you add in YouTube and the Google Network, total advertising revenue makes up 80% of sales.

Investors are drawing a distinction between companies with indispensable products and those that rely on advertisers and other third parties for revenue generation. That puts Microsoft in a more favorable position than Alphabet, and it's a trend that could continue to divide the leaders in technology much further into 2022.