TLDR:
Microsoft’s heavy investment in AI has paid off, with profits exceeding expectations in the latest quarter. The company’s revenue surged by more than 20% in its cloud computing services, and its AI tools are driving better business outcomes. Microsoft’s total revenue increased to $61.86bn, beating analyst expectations, and its shares rose by 4% in after-hours trading.
Microsoft’s heavy bet on AI pays off as it beats expectations in latest quarter
Profits at Microsoft exceed Wall Street’s expectations due to heavy investments in artificial intelligence. The company’s cloud computing revenue surged by more than 20%, and it is integrating AI across its software and services. Microsoft’s revenue for the first quarter of 2024 increased by 17% to $61.86bn, surpassing analyst expectations. Earnings per share also increased by 20% to $2.94.
Microsoft, the world’s largest public company, has seen its shares rise by more than 30% in the past year. The company has made significant investments in AI, including acquiring ChatGPT developer OpenAI and hiring industry talent. AI has contributed 6% of the revenue growth within Microsoft’s Azure cloud computing division.
Microsoft is also monetizing its AI dominance, with AI-based additions to LinkedIn increasing engagement on the platform. The company has signed high-profile AI deals, including a $1.1bn contract with Coca-Cola for AI and cloud computing services. Additionally, Microsoft announced a partnership with AI startup Mistral to offer access to its models through Azure.