Microsoft stock leaps as earnings beats estimates

Microsoft beat analysts’ predictions for revenue and earnings per share when it released its quarterly earnings after the bell on Tuesday. The tech giant beat consensus estimates by reporting revenue of $56.5 billion for the quarter.

Adjusted earnings per share (EPS) peaked at $2.99 as opposed to the expected $2.66. During the same quarter last year, the business reported adjusted EPS of $2.35.

Azure is a part of Microsoft’s Intelligent Cloud division, which generated $24.3 billion in revenue during the quarter.

Wall Street anticipated $23.6 billion in revenue. Revenue from Azure and other cloud services increased 29% in the third quarter, exceeding Wall Street’s forecast of 27%.

Microsoft CEO Satya Nadella said in a statement that “with copilots, we are making the age of AI real for people and businesses everywhere.” “To increase productivity for our customers, we are rapidly integrating AI across every layer of the tech stack, for every role, and for every business process.”

In contrast to analysts’ expectations of $18.3 billion and $12.9 billion, respectively, the company’s Productivity & Business Processes and More Personal Computing each reported revenue of $18.6 billion and $13.7 billion, respectively.

Over the past year, Microsoft has established AI as a pillar of its business, announcing a massive $10 billion investment in OpenAI, the company behind ChatGPT, and releasing generative AI-enhanced versions of its Bing search engine and Edge browser in February.

Since then, the business has released a number of Copilot apps for Outlook, Windows 11, and Microsoft 365 that are powered by generative AI.

The programme can provide an overview of Windows 11 features, help you draught documents and make PowerPoint presentations, and summarise emails. In the future, according to Microsoft, the Copilots will be combined into a single app.

The investments are intended to help Microsoft enter a new growth cycle as customers turn to artificial intelligence to streamline particular business processes and increase employee productivity.

The $69 billion acquisition of Activision Blizzard by Microsoft recently came to a close, in addition to its intense focus on AI capabilities. Microsoft now ranks behind Tencent and Sony as the third-largest video game company in the world by revenue thanks to the deal, which is the largest in the company’s history.

However, the Federal Trade Commission may still attempt to dissolve the businesses on the basis of antitrust provisions.