Microsoft quarterly profits soar on AI and cloud growth / Photo: © AFP
Microsoft quarterly profits soar on AI and cloud growth
Technology giant Microsoft on Wednesday said its profit soared above expectations in the recently ended quarter, driven by its cloud computing and artificial intelligence (AI) units.
Microsoft reported profit of $27.2 billion on revenue of $76.4 billion, some $29.9 billion of which was brought in by its Intelligent Cloud business.
"Cloud and AI is the driving force of business transformation across every industry and sector," Microsoft chief executive Satya Nadella said in an earnings release.
"We're innovating across the tech stack to help customers adapt and grow in this new era."
Microsoft's Azure cloud computing offerings brought in more than $75 billion for the company's fiscal year, which ended on June 30, in an increase of 34 percent from the prior year, according to Nadella.
Microsoft shares jumped about 7 percent in after-market trades that followed release of the earnings figures.
"This was a slam-dunk quarter for Microsoft with cloud and AI driving significant business transformation across every sector and industry," Wedbush Securities analyst Dan Ives said in a note to investors.
"The company continues to capitalize on the AI Revolution."
Microsoft is well-positioned to make money as increasing numbers of companies ramp up efforts to take advantage of artificial intelligence in their businesses, according to Ives.
Microsoft was one of the first tech giants to double down on artificial intelligence when the launch of ChatGPT in 2022 rocked the tech industry.
Like its rivals, it has spent massively on building the infrastructure necessary to power the AI revolution, with analysts keeping a close eye on the return on investment.
The company in January said it was on track to pump about $80 billion into capital and infrastructure in the fiscal year.
Nadella has said finding enough power sources for its AI data center needs was a priority.
Microsoft in early July slashed a little less than four percent of its global workforce as it seeks to cut layers of middle management and leverage new technologies.
"We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace," a Microsoft spokesperson said in an email.
The job cuts follow a round in May that saw about 6,000 positions culled from its global workforce.
The company, which is advancing in its plans to deploy AI across all its products, said it was working to "empower employees to spend more time focusing on meaningful work by leveraging new technologies and capabilities."
S.Clarke--TNT
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