{"id":40728,"date":"2023-07-26T11:17:42","date_gmt":"2023-07-26T15:17:42","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/microsoft-earnings-top-estimates-but-stock-falls-as-execs-detail-ais-costs\/"},"modified":"2023-07-26T11:17:44","modified_gmt":"2023-07-26T15:17:44","slug":"microsoft-earnings-top-estimates-but-stock-falls-as-execs-detail-ais-costs","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=40728","title":{"rendered":"Microsoft earnings top estimates, but stock falls as execs detail AI\u2019s costs"},"content":{"rendered":"
\n

Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading Tuesday after the company discussed the year ahead.<\/p>\n

The technology giant has won favor on Wall Street for its positioning in the artificial-intelligence revolution, though Chief Financial Officer Amy Hood said on Tuesday\u2019s earnings call that \u201ceven with strong demand and a leadership position,\u201d Microsoft\u2019s
\n MSFT,
\n -4.21%<\/bg-quote>
\n \u201cgrowth from our AI services will be gradual.\u201d Microsoft\u2019s AI for its Azure cloud-computing business needs to ramp, and the company is working toward the general availability of its Copilot productivity product. <\/p>\n

\n

Microsoft\u2019s AI revenue impacts will thus be weighted toward the second half of the new fiscal year that just began, she continued. Meanwhile, she expects that Microsoft\u2019s capital expenditures will rise sequentially each quarter \u201cas we scale to meet demand signals.\u201d<\/p>\n

Hood\u2019s commentary came as Microsoft posted fiscal fourth-quarter results Tuesday afternoon that showed a 15% jump in revenue for the company\u2019s cloud-computing segment, which it calls Intelligent Cloud. Revenue for the segment came in at $24.0 billion, while analysts had been anticipating $23.8 billion. The growth rate was 17% on a currency-neutral basis.<\/p>\n

The company said revenue for Azure and other cloud services was up 26%, or 27% in constant currency. Microsoft\u2019s forecast had been for 26% to 27% in constant-currency Azure sales growth, while the company posted 31% constant-currency growth on the metric in the March period. The FactSet consensus was for 27% growth in constant currency.<\/p>\n

\u201cWhile we believe the Street was hoping for Azure growth more in the ~28% range, we believe the consumption part of the business held up well,\u201d Evercore ISI analyst Kirk Materne said in a note to clients. <\/p>\n

For the September quarter, Microsoft anticipates 25% to 26% in constant-currency Azure growth. <\/p>\n

The cloud migration is still in the \u201cearly innings,\u201d Chief Executive Satya Nadella said on the call, while also highlighting a \u201cnew world of AI driving a set of new workloads.\u201d<\/p>\n

\u201cWe think of that, again, being pretty expansive from a TAM [total addressable market] opportunity and we\u2019ll play it out,\u201d he continued, though the company is also up against the \u201claw of large numbers\u201d given the massive scale of its cloud business. <\/p>\n

The company generated fiscal fourth-quarter net income of $20.1 billion, or $2.69 a share, compared with $16.7 billion, or $2.23 a share, in the year-earlier period. Analysts tracked by FactSet were modeling $2.55 a share.<\/p>\n

Overall revenue for Microsoft climbed to $56.2 billion from $51.9 billion, whereas analysts had been expecting $55.5 billion. <\/p>\n

See also<\/strong>: Microsoft bulls are excited as company reveals pricing for AI offering<\/p>\n

Microsoft logged $18.3 billion in revenue for its productivity and business processes unit, up 10% from a year before, or up 12% in constant currency. That part of the business includes LinkedIn and both commercial and consumer versions of Office. Analysts had been looking for $18.1 billion.<\/p>\n

Revenue for the More Personal Computing segment, which includes Windows and Xbox content and services, dropped 4% to $13.9 billion and was off 3% on a constant-currency basis. The FactSet consensus was for $13.6 billion. <\/p>\n

Nadella, meanwhile, expressed optimism about the eventual opportunities brought upon by Microsoft\u2019s Copilot offerings. <\/p>\n

\u201cI do think people are going to look at how can they complement their [operating-expense] spend with essentially these Copilots in order to drive more efficiency and, quite frankly, even reduce the burden and drudgery of work on their OpEx and their people and so on,\u201d he said.<\/p>\n

Evercore\u2019s Materne called the overall results \u201csolid\u201d amid \u201ca lot of macro headwinds.\u201d \u00a0Microsoft\u2019s investment story \u201cgets\u00a0stronger\u00a0in [the second half of the calendar year] as some optical headwinds reverse\u00a0and [comparisons] soften,\u00a0and Microsoft\u2019s position in the enterprise market continues to get stronger as customers look to consolidate\u00a0spending,\u201d he wrote.<\/p>\n

Read<\/strong>: Amazon finally is nearing a bottom on this key measure, analyst says<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading Tuesday after the company discussed the year ahead. The technology giant has won favor on Wall Street for its positioning in the artificial-intelligence revolution, though Chief Financial Officer Amy Hood said […]<\/p>\n","protected":false},"author":1,"featured_media":40729,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-40728","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nMicrosoft earnings top estimates, but stock falls as execs detail AI\u2019s costs | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=40728\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Microsoft earnings top estimates, but stock falls as execs detail AI\u2019s costs | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ifintechworld.com\/?p=40728\" \/>\n<meta property=\"og:site_name\" content=\"iFintechWorld\" \/>\n<meta property=\"article:published_time\" content=\"2023-07-26T15:17:42+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-26T15:17:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/1690384662_horizontal.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1320\" \/>\n\t<meta property=\"og:image:height\" content=\"742\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/ifintechworld.com\/?p=40728#article\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=40728\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\"},\"headline\":\"Microsoft earnings top estimates, but stock falls as execs detail AI\u2019s costs\",\"datePublished\":\"2023-07-26T15:17:42+00:00\",\"dateModified\":\"2023-07-26T15:17:44+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=40728\"},\"wordCount\":652,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"keywords\":[\"Featured\"],\"articleSection\":[\"Investing\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/ifintechworld.com\/?p=40728#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/ifintechworld.com\/?p=40728\",\"url\":\"https:\/\/ifintechworld.com\/?p=40728\",\"name\":\"Microsoft earnings top estimates, but stock falls as execs detail AI\u2019s costs | iFintechWorld\",\"isPartOf\":{\"@id\":\"https:\/\/ifintechworld.com\/#website\"},\"datePublished\":\"2023-07-26T15:17:42+00:00\",\"dateModified\":\"2023-07-26T15:17:44+00:00\",\"description\":\"Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading\",\"breadcrumb\":{\"@id\":\"https:\/\/ifintechworld.com\/?p=40728#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/ifintechworld.com\/?p=40728\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/ifintechworld.com\/?p=40728#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/ifintechworld.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Microsoft earnings top estimates, but stock falls as execs detail AI\u2019s costs\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/ifintechworld.com\/#website\",\"url\":\"https:\/\/ifintechworld.com\/\",\"name\":\"Repay Down\",\"description\":\"Latest Personal Finance News, Tips and Updates\",\"publisher\":{\"@id\":\"https:\/\/ifintechworld.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/ifintechworld.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/ifintechworld.com\/#organization\",\"name\":\"Repay Down\",\"url\":\"https:\/\/ifintechworld.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png\",\"width\":558,\"height\":90,\"caption\":\"Repay Down\"},\"image\":{\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"contentUrl\":\"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/ifintechworld.com\"],\"url\":\"https:\/\/ifintechworld.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Microsoft earnings top estimates, but stock falls as execs detail AI\u2019s costs | iFintechWorld","description":"Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/ifintechworld.com\/?p=40728","og_locale":"en_US","og_type":"article","og_title":"Microsoft earnings top estimates, but stock falls as execs detail AI\u2019s costs | iFintechWorld","og_description":"Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading","og_url":"https:\/\/ifintechworld.com\/?p=40728","og_site_name":"iFintechWorld","article_published_time":"2023-07-26T15:17:42+00:00","article_modified_time":"2023-07-26T15:17:44+00:00","og_image":[{"width":1320,"height":742,"url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/07\/1690384662_horizontal.jpeg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/ifintechworld.com\/?p=40728#article","isPartOf":{"@id":"https:\/\/ifintechworld.com\/?p=40728"},"author":{"name":"News Room","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61"},"headline":"Microsoft earnings top estimates, but stock falls as execs detail AI\u2019s costs","datePublished":"2023-07-26T15:17:42+00:00","dateModified":"2023-07-26T15:17:44+00:00","mainEntityOfPage":{"@id":"https:\/\/ifintechworld.com\/?p=40728"},"wordCount":652,"commentCount":0,"publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"keywords":["Featured"],"articleSection":["Investing"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/ifintechworld.com\/?p=40728#respond"]}]},{"@type":"WebPage","@id":"https:\/\/ifintechworld.com\/?p=40728","url":"https:\/\/ifintechworld.com\/?p=40728","name":"Microsoft earnings top estimates, but stock falls as execs detail AI\u2019s costs | iFintechWorld","isPartOf":{"@id":"https:\/\/ifintechworld.com\/#website"},"datePublished":"2023-07-26T15:17:42+00:00","dateModified":"2023-07-26T15:17:44+00:00","description":"Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading","breadcrumb":{"@id":"https:\/\/ifintechworld.com\/?p=40728#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/ifintechworld.com\/?p=40728"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/ifintechworld.com\/?p=40728#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/ifintechworld.com\/"},{"@type":"ListItem","position":2,"name":"Microsoft earnings top estimates, but stock falls as execs detail AI\u2019s costs"}]},{"@type":"WebSite","@id":"https:\/\/ifintechworld.com\/#website","url":"https:\/\/ifintechworld.com\/","name":"Repay Down","description":"Latest Personal Finance News, Tips and Updates","publisher":{"@id":"https:\/\/ifintechworld.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/ifintechworld.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/ifintechworld.com\/#organization","name":"Repay Down","url":"https:\/\/ifintechworld.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/rep-logo-dark.png","width":558,"height":90,"caption":"Repay Down"},"image":{"@id":"https:\/\/ifintechworld.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/6224724fd4116361255b179dc5c70b61","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/ifintechworld.com\/#\/schema\/person\/image\/","url":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","contentUrl":"https:\/\/ifintechworld.com\/wp-content\/uploads\/2023\/04\/avatar_user_1_1682606986-96x96.png","caption":"News Room"},"sameAs":["https:\/\/ifintechworld.com"],"url":"https:\/\/ifintechworld.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/40728","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=40728"}],"version-history":[{"count":1,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/40728\/revisions"}],"predecessor-version":[{"id":40730,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/posts\/40728\/revisions\/40730"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=\/wp\/v2\/media\/40729"}],"wp:attachment":[{"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=40728"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=40728"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ifintechworld.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=40728"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}