Microsoft disappoints despite $64.7 billion revenue in Q2
Microsoft’s cloud (remote computing) and artificial intelligence (AI) services division below analysts’ expectations on Tuesday, leaving investors expecting returns on their investments despite better-than-expected quarterly results
The tech giant reported sales of $64.7 billion for the April–June quarter, up 15% year over year, generated $22 billion (+10%). However, following the Wall Street close, its shares fell more than 3% after trading.
Azure, the company’s cloud platform that houses the new generative AI tools, increased by 29%, less than the market’s prediction. With its incredibly advanced CPUs, Nvidia is the other company that is reaping the biggest benefits from the emergence of generative AI and its models (such as ChatGPT), which can generate excellent content from a straightforward question in natural language.
Microsoft has emerged as the front-runner of this “revolution” after investing billions of dollars in OpenAI, the startup that created ChatGPT.Microsoft’s CFO, Amy Hood, stated in April that the business was experiencing “somewhat higher demand in AI than its current capabilities” and that “capital expenditures are going to increase significantly.”
This year, the Windows group announced investments in AI over $15 billion abroad, from France to Japan and Indonesia. The primary goal of these investments is to construct and fund the requisite energy and technical infrastructure. Google’s shares dropped on Wall Street last week despite even better-than-expected results because its spending exceeded market estimates.
Microsoft’s personal computer division reported almost $16 billion in revenue in the fourth quarter of its staggered fiscal year, up 14% from the previous year, driven by sales of its Windows operating system and Xbox. Conversely,, its device sales decreased by 11% following a difficult year.
The group is reliant on “AI PCs” to steer them in the right direction. These computers, which debuted in May, have generative AI capabilities integrated into the Windows operating system to help the user with every task.
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