Microsoft’s Cloud and AI Business Drives Strong Quarterly Results
REDMOND, Wash. (AP) — Microsoft’s cloud computing and artificial intelligence business helped deliver $70.1 billion in sales and boosted profits by 18% for the January-March quarter, providing relief 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, beating Wall Street expectations for earnings of $3.22 a share. Revenue for the period, Microsoft’s third fiscal quarter, was up 13% from the same period a year ago, also surpassing Wall Street expectations. Analysts polled by FactSet had expected Microsoft to post revenue of $68.44 billion for the quarter.
Microsoft CEO Satya Nadella credited cloud growth for the company’s strong quarter. “Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” Nadella said in a statement. The company’s cloud unit posted revenue of $26.8 billion, compared with expectations of $26.17 billion, representing a 21% growth.
The personal computing unit, which includes Microsoft’s laptop business and Xbox services, saw a 6% increase in revenue to $13.4 billion. Nadella noted on a call with investors that demand for cloud and artificial intelligence remained strong, and Microsoft is continually adjusting its investments based on efficiency improvements and customer needs.
Despite the tech industry facing uncertainty, Microsoft’s results pleased investors, sending the company’s stock up more than 6% in after-hours trading following the earnings report. Microsoft’s stock price has dropped nearly 8% since President Donald Trump’s inauguration in January, but the strong quarterly results provided a boost.
Microsoft is among the tech industry’s bellwether companies that have navigated a period of uncertainty since Trump’s inauguration, with stock fluctuations impacting shareholder wealth amid tariffs and other actions. However, the company’s strong performance in cloud computing and AI helped mitigate some of these challenges.
