Microsoft beats earnings and revenue expectations, led by cloud services with AI

The revenue for the quarter was $52.86 billion, beating the expected $51.02 billion. Following the announcement, Microsoft's shares rose by 9% in extended trading on Tuesday.

Microsoft's CFO, Amy Hood, has called for a revenue range of $54.85 billion to $55.85 billion. The midpoint of the range, at $55.35 billion, implies a growth of 6.7%, which is higher than the consensus among analysts surveyed by Refinitiv.

Hood is also bullish on artificial intelligence (AI) and has stated that Microsoft will continue to invest in cloud infrastructure, particularly in AI-related spending, as the company scales up to the growing demand driven by customer transformation.

Their Intelligent Cloud business segment, which includes the Azure public cloud, Enterprise Services, SQL Server, and Windows Server, generated $22.08 billion in revenue, up 16% and higher than the $21.94 billion consensus among analysts surveyed by StreetAccount. Revenue from Azure and other cloud services grew by 27%, compared to 31% in the previous quarter. Although analysts had expected 26.5% growth on average, the growth rate was still impressive.

The company’s ability to exceed expectations for its fiscal third-quarter results and quarterly guidance, driven by its investments in AI-related technologies, cloud infrastructure, and revenue per user, has boosted investor confidence in the company's growth prospects.

Source: CNBC