[Earnings Preview] Microsoft is paying attention to growth momentum! Can we win in the AI monetization competition?

●What about Microsoft7/30 (local) after closingFinancial results for Q4 (April-6) will be announced on
● Investors are paying attention to the continued growth of Microsoft's Azure cloud business
● Microsoft may provide investors with the latest information on artificial intelligence initiatives
● Cloud growth and investment in AI will be strictly examined within a high level of variation

Microsoft's intelligent cloud business is still MicrosoftThe segments with the highest growth rateIt is,It accounts for 43% of total salesIt's there. According to the forecast for the fourth quarter of '24, the same segment$28.7 billion, up 19.5% year over yearIt is expected to reach, and although the growth rate has slowed slightly, it is still strong. AI continues to be an important focus for Azure, and there are an increasing number of cases where companies are adopting AI solutions to enhance their operations. This trend is expected to maintain Azure's growth momentum and strengthen Microsoft's leadership in the cloud services market.

Microsoft gained market share in the global cloud infrastructure market during the quarterExpanded to a record high of 25%Also, it is in 2nd place after Amazon's AWS (31%). Analysts pointed out that the performance of Microsoft partner companies was strong ahead of financial results to be announced on July 30, and many showed strong performance above or as expected. Analysts say AI workloads contribute 8% to Azure's31.5% compared to the previous yearThen, it is predicted that it will exceed the initial forecast of 30.5%.

One of the main reasons why Microsoft's stock price skyrocketed last time was that this division grew more than expected. Last quarter's revenue for Microsoft's Intelligent Cloud division26.7 billion dollars, up 20% from the previous yearThen, stock prices are out of hoursA rise of 5% or moreI did it. Among them, sales of server products and cloud services24% increaseAs a result, sales of Azure and other cloud services31% increaseI achieved it. According to Microsoft,7% of sales growth is due to AI demandSo,6% for the second quarterIt was.

Microsoft's “personal computing” division in the third quarter of 2024 was driven by stronger sales than expected by gaming and Windows OEMs,Surprising positive growthIt became. Of the fourth quarter of 202411.2% year over yearThere is a possibility that it will stabilize,Growth rate in the first half of the double digitsIt is expected that recovery will progress.

BofA analysts at More Personal Computing (MPC) saySupported by PC shipments that exceeded expectations, against the forecast of 15.5 billion dollarsAn upside of 50 million dollarsI'm expecting it. The PC market has gone through 8 consecutive quarters of declineAchieved growth in the second quarter. According to the International Data Corporation (IDC), global shipments in the second quarter of 2024 reached 64.9 million units,It showed growth of 3% compared to the previous year。

The “Productivity and Business Processes” division will open in the fourth quarter of 2024Achieved stable growth of 10% compared to the previous yearThere is a possibility, and growth in average sales per user (ARPU) due to the continued momentum of E5 and progress in the early stages of Microsoft 365 Copilot will further support it.

Microsoft's Office suite, specifically E3 and E5 premium subscriptions,Significant contribution to the company's revenue growthDoing it. As for BofA, if Microsoft's Copilot (generative AI tool integrated into Office applications) becomes popular at an early stage,Growth will accelerate even furtherI'm predicting that. This technological innovation has improved productivity and user experience, and is poised to maintain the current profit ratio of Office products.

Considering the recent rapid increase in capital investment by Alphabet and major cloud companies, in particular, “Mag7,” which includes Microsoft, Amazon, and MetaKeep an eye on comments about depreciation and amortization when talking about EPS and gross profit marginI need to do it.

Last quarter, Microsoft's capital investment was” due to an increase in cloud and AI infrastructure investments”Significant increase compared to the previous quarterIt showed the outlook.” However, despite a large investment, 2024'sOperating margin increased by 2 points or more compared to the previous yearThen, the market showed a sense of security with the company's guidance that the operating profit margin for fiscal year 2025 would only decrease by about 1 point compared to the previous year. If the company's profit margins show resilience, the market will welcome it. Market participants will also hope that huge investment expenses will be quickly converted into profitable features rather than long-term ones.

Analysts say that strong performance of Azure and Office continues to be strong in Microsoft's 2025 earnings forecastThe double-digit increase in sales continues、Margin decreased by 100 basis points due to higher cost of sales due to increased capital investmentI anticipate that.