Microsoft’s Cloud and AI Business Drives Strong Quarterly Performance
Microsoft’s cloud computing and artificial intelligence business helped drive $70.1 billion in sales and boosted profits by 18% for the January-March quarter, providing a much-needed boost for investors during a turbulent time for the tech sector and U.S. economy. The company reported quarterly net income of $25.8 billion, or $3.46 per share, exceeding Wall Street expectations for earnings of $3.22 a share.
The Redmond, Washington-based software maker posted revenue of $70.1 billion in the period, its third fiscal quarter, representing a 13% increase from the same period a year ago and beating Wall Street expectations of $68.44 billion. Microsoft CEO Satya Nadella attributed the strong quarter to cloud growth, stating, “Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth.”
The company’s cloud unit generated revenue of $26.8 billion, surpassing expectations of $26.17 billion. This represented a 21% growth in revenue from Microsoft’s cloud computing business segment. Additionally, the personal computing unit saw a 6% increase in revenue, driven by its laptop business and Xbox services.
Despite the tech industry facing uncertainty and turmoil since President Donald Trump’s inauguration, Microsoft’s earnings report pleased investors, sending stocks up more than 6% in after-hours trading. The company’s stock price has dropped nearly 8% since Trump’s inauguration to about $395 at the close of markets Wednesday.
Microsoft’s personal computing business, centered around its Windows operating system, reported revenue of $13.4 billion for the quarter, up 6% from the first three months of last year. Nadella noted that demand for cloud and artificial intelligence remained strong, and the company continues to adjust its investments based on efficiency improvements in computing systems and customer needs.
