Microsoft (MSFT) announced its fiscal fourth-quarter earnings on Wednesday, exceeding analysts’ predictions on both earnings and revenue, largely driven by robust cloud performance. Following the release of these results, shares of Microsoft surged by more than 6%.
CEO Satya Nadella emphasized the pivotal role of cloud and artificial intelligence (AI) in driving business transformation across various industries. He noted that the company’s cloud platform, Azure, achieved over $75 billion in revenue—a remarkable increase of 34% attributable to strong growth across all workloads.
For the quarter, Microsoft reported adjusted earnings per share (EPS) of $3.65, with total revenue reaching $76.4 billion. Analysts had predicted an adjusted EPS of $3.37 and revenue of $73.89 billion. In comparison, the same quarter last year saw adjusted EPS of $2.95 and revenue of $64.72 billion.
The Intelligent Cloud segment, which includes Azure, brought in $29.8 billion, also surpassing the anticipated $29.09 billion. Microsoft’s impressive earnings arrive shortly after Google (GOOG, GOOGL) reported better-than-expected second-quarter results due to its cloud revenue growth. Google has announced an additional investment of $10 billion towards its AI initiatives, raising its total this year to $85 billion.
Despite the positive outlook, some analysts, such as Wedbush’s Dan Ives, suggest that while AI developments are gaining momentum in fiscal year 2025, fiscal year 2026 will be the crucial period for Microsoft to capitalize on its AI investments.
Moreover, BofA Global Research’s Brad Sills highlighted that Microsoft’s AI-driven Copilot software could emerge as a significant growth driver for the company. Microsoft’s pioneering role in AI, largely due to its early investments in OpenAI, positions it favorably in this rapidly evolving tech landscape. However, there are concerns regarding OpenAI’s ambitions to shift its for-profit arm to a public benefit corporation and the implications for Microsoft’s equity stake.
The current performance of Microsoft demonstrates the company’s strong footing in an increasingly competitive environment, with promising potential for future growth through AI and cloud technologies.