Microsoft said Wednesday that its profit for the October-December quarter grew 10% as it works to capitalize on the huge amounts of money it has spent to advance its artificial intelligence technology.
But while its overall profits and revenue beat Wall Street expectations, it slightly missed projections for its closely watched cloud computing business, a centerpiece of its AI efforts.
The company reported net income for the quarter of $24.1 billion, or $3.23 per share, beating Wall Street expectations of $3.11 per share. The Redmond, Washington-based software maker posted revenue of $69.6 billion in the quarter, up 12% from the previous year, also beating expectations.
Analysts polled by FactSet Research expected Microsoft to generate revenue of $68.87 billion in the last three months of the year.
Sales from Microsoft’s cloud-focused business segment that includes its flagship Azure computing platform grew 19% from the same time last year to $25.5 billion, which was less than the $25.83 billion forecast by FactSet analysts.
Microsoft’s productivity business segment, which includes its Office suite of email and other workplace products, grew 14% to $29.4 billion.
Its personal computing business, led by its Windows division, remained steady at $14.7 billion, with a drop in consumer device sales offset by growth in advertising revenue tied to the Bing search engine.
Microsoft shares dropped 5% in after-hours trading Wednesday but were still higher than Monday, when the tech giant was hit by a broader tech stock sale caused by a frenzy over the new ChatGPT competitor developed by Chinese tech startup DeepSeek.
Microsoft is a close partner of ChatGPT maker OpenAI and also sells its own AI chatbot services, branded as Copilot. Part of what drove the Wall Street panic this week was concern over the startup’s claims that it was catching up to U.S. tech titans on a fraction of their budget.
Microsoft CEO Satya Nadella downplayed those concerns on an investor call Wednesday, saying “DeepSeek had some real innovations” and it is good to have efficiency gains and lower prices in AI development because it “means people can consume more and there’ll be more apps written.”
Microsoft also added DeepSeek’s latest AI model to those available on its Azure computing platform Wednesday.
Building and operating AI systems is costly, and Microsoft has said it plans to spend $80 billion this year as it expands its global network of energy-hungry computing centers and supplies them with specialized chips to train and run AI models.
“We have more than doubled our overall data center capacity in the last three years and we have added more capacity last year than any other year in our history,” Nadella said.
—Matt O’Brien, AP Technology Writer
Login to add comment
Other posts in this group
George Arison is telling me about a hookup.
Arison, the 47-year-old CEO of the LGBTQ dating app and social network Grindr, recalls an encounter with a man who ranked low in physical chem
Just two years ago, prompt engineering was hailed as a hot new job in tech. Now, it has all but disappeared.
At the beginning of the corporate AI boom, some companies sought out large la
Summoning a robotaxi from your phone is not a futuristic fantasy since Waymo achieved full commercial deployment.
https://www.fastcompany.com/91325288/goodbye-human-drivers-waymos-robotaxis-a
Haliey Welch, better known as the Hawk Tuah girl, is ready for a rebrand.
After being thrust into the spotlight in 2024, thanks to her now-iconic “Hawk Tuah” catchphrase—featured in a vi
Anthropic is turning to a Biden administration alum to run its new Beneficial Deployments team, which is tasked with helping extend the benefits of its AI to organizations focused on social good—p
