Microsoft’s Cloud and AI Business Drives Strong Quarterly Performance
REDMOND, Wash. (AP) — Microsoft’s cloud computing and artificial intelligence business helped drive $70.1 billion in sales for the January-March quarter, providing a boost to investors during a turbulent period 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 of $3.22 per 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 last year. Analysts polled by FactSet had expected Microsoft to report revenue of $68.44 billion for the quarter. Microsoft CEO Satya Nadella attributed the company’s strong performance 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 $26.8 billion in revenue, 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 facing uncertainty related to tariffs, particularly in its personal computing business centered around the Windows operating system, Microsoft’s overall performance was robust. Revenue from this business segment was $13.4 billion for the quarter, up 6% from the first three months of the previous year.
Microsoft’s stock price had dropped nearly 8% since President Donald Trump’s inauguration in January. However, following the release of the earnings report, the company’s stock rose more than 6% in after-hours trading. Nadella noted that demand for cloud and artificial intelligence remained strong, and the company continues to adjust its investments based on efficiency improvements and customer needs.
