Microsoft revenue surges to US$62bil as AI bet delivers
Published on: Wednesday, January 31, 2024
By: AFP
The AI revolution propelled Microsoft past Apple, making it the world’s largest company with a market capitalisation exceeding US$3 trillion. (AP pic)
SAN FRANCISCO: Microsoft quarterly results beat expectations on Tuesday as the tech giant saw demand for its artificial intelligence services stoke revenue.
The company said sales leaped to US$62 billion for the October to December period, up 18% year-on-year and above the US$61.1 billion projected by analysts.
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“We’ve moved from talking about AI to applying AI at scale,” said Satya Nadella, chairman and CEO of Microsoft.
Net profit also beat expectations at US$21.9 billion, instead of the US$20.71 projected by analysts.
Crucially, revenue for Microsoft’s Azure cloud services jumped by 30% in the period, driven by the bigger computing needs that come with the adoption of AI.
Overall, Microsoft’s cloud services sales were up by 24%, the company said.
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“By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector,” Nadella said.
The AI revolution has propelled Microsoft past Apple as the world’s biggest company by market capitalisation at more than US$3 trillion in value .
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The company’s share price is up a staggering 70% from a year ago.
The wind in its sails comes from Wall Street’s belief that Microsoft will benefit from the leap forward in AI, and the results on Tuesday were the biggest piece of evidence yet.
Through its US$13 billion partnership with ChatGPT-maker OpenAI, Microsoft has rolled out generative AI capabilities across its product line, with its Azure cloud service delivering the computing power to businesses.
During the quarter, corporate customers were given the option to pony up extra payments for the company’s AI Copilot and other services.
In that period, the company also finalised its blockbuster buyout of “Call of Duty” maker Activision Blizzard, making it the third biggest gaming company in the world.
That closed deal saw Microsoft lay off 1,900 people, or 8% of staff, from its gaming division.
Layoffs in the October to December period also took place at LinkedIn, the company business friendly social network.
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