Microsoft beats quarterly revenue estimates
· CNA · Join:Microsoft beat Wall Street estimates for first-quarter revenue on Wednesday as efforts to build out data center capacity and AI-driven demand boosted its cloud business.
Shares of the Redmond, Washington-based company rose about 2 per cent in trading after market hours.
The quarterly earnings are Microsoft's first since it restructured the way it reports its businesses to align them more closely with how they are managed. That move has, however, made it harder to estimate the quarter's performance.
Azure revenue grew 33 per cent, compared with Visible Alpha estimates for a 32 per cent increase.
Earnings per share stood at $3.30, compared with analysts' average estimate of $3.10, according to LSEG data.
Revenue rose 16 per cent to $65.6 billion in the fiscal first quarter ended September, compared with analysts' average estimate of $64.5 billion, according to LSEG.
Microsoft has been the worst performer among Big Tech names this year, having gained just over 15 per cent, while Meta has surged 68 per cent and Amazon climbed 28 per cent.
Seen as the leader among Big Tech peers in the AI race, thanks to its early investment in ChatGPT maker OpenAI, Microsoft has ramped up AI services across its product offerings, helping attract more customers.
The company has said that Azure's market share gains were being driven by AI, as it loaded the cloud computing platform with AI features and models - including OpenAI's newest o1 models, capable of answering challenging math, science and coding problems.
The upgrade has also been helping increase average spend per customer.
Microsoft's rival Google has also benefited from AI growth. On Tuesday, it said AI helped drive a 35 per cent surge in its cloud business. Its shares closed up over 2.8 per cent on Wednesday.
For the quarter, Microsoft said capital expenditures rose 5.3 per cent to $20 billion, compared with $19 billion in the previous quarter. That was higher than Visible Alpha estimates of $19.23 billion.
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