Microsoft reports gains from cloud and AI investments
Microsoft reported strong quarterly earnings driven by growth in its cloud and AI divisions, with significant revenue contributions from Copilot and investments in OpenAI and Anthropic. Despite high capital expenditures on AI infrastructure, the company's stock rose following the report.
Why it matters
Microsoft's financial performance serves as a key indicator of whether the massive industry-wide investment in artificial intelligence is yielding tangible commercial returns.
Microsoft beat analysts' expectations in its latest quarterly report, saying Wednesday that the results were partly driven by its cloud and artificial intelligence divisions.
The tech giant reported $90 billion in revenue and $35.8 billion in net income in the last quarter of its fiscal year which ended in June, potentially alleviating concerns from investors and analysts about whether its investments in AI are paying off.
Its AI-powered business productivity tool, called Copilot, also has over 30 million paid users which shows "confidence" from customers as they use Microsoft to "power their AI transformation," CEO Satya Nadella said in a statement.
Microsoft also saw a $3.2 billion gain from its investment in Anthropic, the company said.
Its investments in OpenAI boosted Microsoft's net profit by $480 million in its fourth quarter and $4.9 billion for its full fiscal year, the company added.
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