Microsoft’s January-March financial results exceed expectations as AI introduction contributes | Reuters

The stock rose more than 4% in after-hours trading, adding $128 billion to the company’s market capitalization.

“Microsoft’s AI-backed financial results show that its increased innovation is paying off,” said Jeremy Goldman, senior director of briefings at E-Marketer. He mentioned his investment in OpenAI, a U.S. startup that works on the generative AI “Chat GPT.”

Sales rose 17% to $61.9 billion, exceeding market expectations compiled by LSEG ($60.8 billion). Earnings per share were $2.94, which also exceeded market expectations ($2.82).

At the same time, capital investment centered on AI increased from $11.5 billion in the same period last year to $14 billion. This exceeded analysts’ expectations ($13.14 billion) compiled by research firm Visible Alpha.

Sales of the Intelligent Cloud segment, which includes cloud service Azure, increased to $26.7 billion. Market expectations were for $26.24 billion, according to LSEG data.

Azure sales increased 31%. Visible Alpha had predicted a 29% increase.

The AI ​​tool “CoPilot”, which was launched for companies at a monthly fee of $30 in November last year, is contributing to the growth of enterprise software and the Windows business, and sales of the “More Personal Computing” division, which includes Windows, increased. The market rose 17% to $15.6 billion, exceeding the market estimate of $15.08 billion compiled by LSEG.

A recovery in PC sales also contributed.

Sales of the division, which includes the business software “Office” and the business social networking site (SNS) LinkedIn, rose 12% to $19.6 billion. The market estimate was $19.54 billion.

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Anna Tong is a correspondent for Reuters based in San Francisco, where she reports on the technology industry. She joined Reuters in 2023 after working at the San Francisco Standard as a data editor. Tong previously worked at technology startups as a product manager and at Google where she worked in user insights and helped run a call center. Tong graduated from Harvard University.