Microsoft (MSFT) is set to release its fiscal fourth quarter earnings, and all eyes are on the impact of AI investments in the Big Tech sector. As Wall Street eagerly anticipates the results, investors are looking for signs that Microsoft’s significant AI investments are starting to pay off.
According to data compiled by Bloomberg, Microsoft is expected to report earnings per share of $2.94 on revenue of $64.5 billion for the quarter. This would be an increase from the EPS of $2.69 and revenue of $56.2 billion reported during the same period last year. Cloud revenue is expected to reach $36.8 billion, with Intelligent Cloud revenue, including Azure, projected to hit $28.7 billion.
In its previous quarter, Microsoft revealed that AI services contributed 7 percentage points of growth to Azure and other cloud services revenue, showing a steady increase from previous quarters. This highlights the growing importance of AI within Microsoft’s cloud services ecosystem.
Shares of Microsoft have risen 13% year to date, reflecting investor confidence in the company’s growth trajectory. The upcoming earnings report follows Alphabet, Google’s parent company, which recently announced an uptick in cloud revenue thanks to the growing interest in AI products.
Analysts believe that Microsoft is well-positioned to capitalize on the AI wave, with Wedbush analyst Dan Ives noting that Microsoft’s leadership in AI is accelerating cloud deal flow for Azure. UBS Global Research analyst Karl Keirstead also pointed out that Microsoft is gaining market share from competitors like Google and Amazon due to its early lead in AI.
Beyond financial performance, investors are keen to know how much Microsoft plans to invest in AI moving forward. In the previous quarter, the company reported capital expenditures of $14 billion, a substantial amount dedicated to building out its AI infrastructure.
As the tech industry continues to focus on AI as a key growth driver, Microsoft’s earnings report will provide valuable insights into the company’s strategy and potential for future growth. Stay tuned for more updates on the latest financial news and analysis from Extreme Investor Network.