Microsoft Profit Jumps 10%, but Cloud Computing Grows Less Than Expected

🌈 Abstract

The article discusses Microsoft's recent quarterly financial results, focusing on the company's investments in artificial intelligence (AI) and its impact on the cloud computing business.

🙋 Q&A

[01] Advertisement

1. What were the key financial results reported by Microsoft in the latest quarter?

• Microsoft's revenue grew 15% year-over-year to $64.7 billion.
• Profit rose 10% to $22 billion.
• The results beat Wall Street's expectations and Microsoft's own predictions.

2. How did Microsoft's cloud computing business perform?

• Azure, Microsoft's flagship cloud computing product, grew 30% in the quarter after accounting for currency fluctuations.
• However, the growth was slightly lower than the 30-31% range that investors had expected.
• Microsoft said it could have sold more cloud services if it had enough data center capacity, and that the constraints would last through the end of 2024.

3. How is Microsoft investing in AI?

• Microsoft is spending heavily to build data centers and acquire the necessary chips to power its AI technology.
• The company's capital expenses have grown every quarter since late 2022 when the CEO pushed for big investments in AI.
• Microsoft spent almost $19 billion on capital expenses last quarter, more than twice as much as two years earlier.

4. How are Microsoft's AI investments impacting its other businesses?

• The company says its AI investments are attracting new customers to its cloud business.
• There is an "AI halo effect" that benefits the rest of Microsoft's businesses, according to an analyst.

5. What is Microsoft's outlook for the future?

• Microsoft told investors to expect its operating profit to be slightly lower in the next fiscal year.
• The company also said its capital expenditures would continue growing as it invests more in AI.

[02] Karen Weise

1. Who is Karen Weise and what is her role? Karen Weise has covered Microsoft since 2018 and is based in Seattle. Her coverage focuses on Amazon and Microsoft, two of the most powerful companies in America.