SAN FRANCISCO, OCT 31 – Microsoft reported strong quarterly results yesterday, beating analysts’ expectations with revenue rising 16 percent to US$65.6 billion, driven by strong growth in its cloud computing and artificial intelligence (AI) businesses.
The tech giant reported net income of US$24.7 billion for the quarter ended September 30, marking an 11 percent increase from the same period last year. Earnings per share increased 1 percent to US$3.30.
“AI-driven transformation is changing work…and workflows across every role, function and business process,” said Microsoft CEO Satya Nadella, adding that the company is winning new customers through its AI platform and tools.
Microsoft has been at the forefront of the generative AI revolution, thanks in large part to its partnership with OpenAI, the creator of ChatGPT.
The company has been rapidly rolling out AI features, particularly under its Copilot brand, asking its cloud computing customers to upgrade to the new technology.
“Microsoft’s latest earnings came in slightly above expectations, but the results may leave some investors wanting more clarity,” said Emarketer senior director Jeremy Goldman.
“Wildcard real this quarter is Microsoft’s AI investment. It pours cash into building infrastructure, with huge capital expenditure implications. However, the returns from AI remain a promise rather than a current reality,” he added.
Azure, Microsoft’s cloud computing platform, saw strong growth with revenue up 34 percent, when adjusted for currency fluctuations.
During the quarter, Microsoft also returned US$9.0 billion to shareholders through dividends and share buybacks, helping to boost the stock’s value.
Microsoft shares rose slightly in after-hours trading.
Google parent Alphabet on Tuesday set the scene for a strong earnings season for the tech big, as its cloud computing division posted strong results on the back of AI adoption by search engine users. – AFP
