Good but not overwhelming is some of the feedback when it comes to Microsoft’s second quarter earnings yesterday evening. ‘Tepid’ was another word used to describe the earnings by Bloomberg. But could there be a silver lining in Microsoft’s cloud business?
Looking at market reaction you might think that the results weren’t very good. But sales have risen 8% during a downturn for many others on the market.
What the results mean are that as opposed to the 10% annual growth that Microsoft has had in the last five years, this year the results dropped to 7%. This is on the back of the tech giant firing 10,000 workers in March. And its harnessing of AI. Although a delay in implementation of AI into Microsoft’s products is one of the reasons that results could have been better.
“The next major wave of computing is being born, as the Microsoft Cloud turns the world’s most advanced AI models into a new computing platform,” said Satya Nadella, chairman and CEO of Microsoft. “We are committed to helping our customers use our platforms and tools to do more with less today and innovate for the future in the new era of AI.”
Amy Hood, CFO of Microsoft added how “Microsoft Cloud revenue was $27.1 billion, up 22% year-over-year.”
Cloud remains at the top of the pile
Microsoft reported the revenue of three different parts of the business. In productivity and business processes the firm saw $17 billion in revenue which was an increase of 7%. But in the personal computing business, revenue was $14.2 billion. A decrease of 19% as customers stop spending on things like Xbox content or Windows OEM.
The highlight was the cloud business. Of which Azure is a huge part.
Satya Nadella shared how sales of Azure cloud-computing services represented more than half of $110 billion of cloud revenue in fiscal 2023, the first time that Azure has accounted for the majority of the company’s annual cloud-computing business.
Additionally OpenAI’s customer base has increased from 4,500 in May to 11,000 today. Representing a new revenue stream in the future for the tech giant.
Elsewhere Google’s Alphabet after second-quarter profits exceeded Wall Street expectations.
Things may not be as rosy as they were a few years ago, but big tech is definitely still growing.
Author: Andy Samu
#Microsoft #Azure #OpenAI #Cloud #Earnings
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