Microsoft reports strong results driven by cloud and AI

With revenue up 13% to $70.1 billion, the IT giant Microsoft reported good quarterly earnings on Wednesday. The company’s cloud computing and artificial intelligence divisions performed particularly well.

After-hours trading saw Microsoft’s share price rise by more than 5% as a result of the findings, which significantly above analyst estimates.

With concerns that US multinational corporations may be negatively impacted by President Donald Trump’s administration’s high tariff plans, all eyes will be on the company’s future forecast when it speaks with analysts.

Microsoft has remained more discreet in its support for Trump than its rivals, many of which contributed money to the president’s inauguration fund and announced major investments in the United States.

Microsoft, which celebrates its 50th anniversary this year, saw net profits climb 18 percent to $25.8 billion, compared to the same period last year.

Crucially, Microsoft Cloud revenue reached $42.4 billion, growing 20 percent year-over-year, which Chief Financial Officer Amy Hood attributed to “continued demand for our differentiated offerings.”

When the introduction of ChatGPT in 2022 shook the tech world, Microsoft was among the first major corporations to make a significant investment in artificial intelligence.

It has invested heavily in creating the infrastructure required to drive the AI revolution, much like its competitors, and analysts are closely monitoring the return on that investment.

In January, the business announced that it was on course to invest roughly $80 billion in AI during this fiscal year.

This quarter, Microsoft announced that its partnership with OpenAI, the company that created ChatGPT, was changing and that it would no longer be the sole supplier of the startup’s enormous processing requirements.

It has been a major backer of OpenAI, mainly by providing the heavy computing capacity required to build AI models.

The company’s Intelligent Cloud segment, a key part of Microsoft’s business, showed particularly strong growth with revenue of $26.8 billion, up 21 percent.

Its Azure and other cloud services revenue surged 33 percent, reflecting the increasing adoption of Microsoft’s cloud platforms.

The Productivity and Business Processes division, which includes Office 365 and LinkedIn, generated $29.9 billion in revenue, a 10 percent increase.

The company said it returned $9.7 billion to shareholders through dividends and share repurchases during the quarter.

This article has been posted by a News Hour Correspondent. For queries, please contact through [email protected]
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