Microsoft's Earnings Soar on Cloud Sales, Well Above Wall Street Expectations
For the period ending March 31, the Redmond, Washington-based software giant
The West Coast tech titan was expected to report third-quarter earnings per share of $3.20 on revenue of $68.54 billion, according to FactSet's consensus estimates. During the
'Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,' said Nadella, noting that Microsoft Cloud revenue rose 20 percent to $42.4 billion.
In highlighting the company's growing AI business, Nadella said Microsoft continues to expand its global data center capacity to handle the growth of cloud computing and AI businesses. He said Microsoft opened data centers in 10 countries across four continents during the quarter.
'We continue to optimize and drive efficiencies across every layer from data center design to hardware and silicon to system software to model optimization, all towards lowering costs and increasing performance,' Nadella said.
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For the quarter, Microsoft reported capital spending of $16.7 billion, up from $11 billion in the same period a year earlier. CFO Amy Hood told analysts that the company's capital expenditure outlook remained unchanged but noted that 'it will grow at a lower rate than fiscal 2025 and will include a great mix of short-lived assets.'
'These investments, along with focused execution that delivers near-term value to our customers, will continue to lead the cloud and AI opportunity ahead,' Hood said.
Microsoft
Currently, Microsoft and OpenAI have revenue-sharing agreements that flow both ways, ensuring that both companies benefit from increased use of new and existing models. Microsoft is already a major investor in OpenAI, providing funding and capacity to support its advancements while benefiting from its valuation growth.
Microsoft also reiterated its partnership with OpenAI on the Stargate AI infrastructure project. During a White House ceremony on Jan. 21, Microsoft, OpenAI, Oracle, and Japanese investor Softbank first announced the Trump-endorsed
British technology company Arm Holdings plc, Microsoft, NVIDIA, and Oracle agreed to deploy an initial $100 billion investment immediately.
In January, Microsoft also
At the close of business on April 20, Microsoft's shares closed up 0.31 percent at $395.26 on the Nasdaq Stock Exchange. In the after-hours session, the stock gained 6.93 percent $425.
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