Microsoft exceeds expectations thanks to cloud success and AI investments

Microsoft has exceeded analysts' expectations with its recent quarterly figures. This success is primarily attributed to the strength of its cloud business. The company is among the major beneficiaries of the AI boom, not least due to its multi-billion dollar investments in cloud infrastructure and the development of ChatGPT by its partner company OpenAI. Nevertheless, Microsoft faces growing competition from giants like Amazon, Google's parent company Alphabet, and Salesforce, which are also developing their own AI solutions. The Microsoft stock saw an increase of about 28 percent over the past year. Despite this impressive performance, it lagged behind the broader S&P 500, which recorded a rise of 41 percent. In comparison, Alphabet's shares increased by 42 percent, and Amazon's even by 49 percent. In the first quarter of the fiscal year, Microsoft reported earnings per share of $3.30 with a revenue of $65.6 billion. Analysts had previously expected earnings per share of $3.10 and revenue of $64.5 billion. In the same period of the previous year, earnings per share were $2.99 with a revenue of $56.5 billion. Microsoft's commercial cloud business revenue, which includes, among other things, the sale of cloud services, reached $38.9 billion, exceeding expectations of $38.1 billion. The PC market is showing initial signs of recovery after sales plummeted following the pandemic-driven boom. Together with its manufacturers, Microsoft is pursuing a new strategy with the so-called Copilot+ PCs. These devices, which can execute AI processes directly, aim to leverage the artificial intelligence hype for the PC industry.