Microsoft – shares rise on revenue beat
- Revenue rose 17% to $61.9bn in the third quarter, compared to expectations of $60.8bn.
- Cloud revenue rose 23% to $35.1bn.
- Operating profit rose to $27.6bn from $22.4bn.
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown:
“The path to AI monetisation is clearest for Microsoft. Its substantial AI investments have driven gains in its formidable cloud business, and its other products are also easily kitted out with AI additions. While there are rumblings of tech-spending pullbacks, the overriding message is that Microsoft remains potentially the biggest beneficiary of AI demand over the longer-term, when compared to its immediate peers. The tech market is homed in on outlook statements more so than ever this earnings season, and this is the area that will truly move the dial. We’ve moved on from good being good enough – investors now demand a sense of what the future holds.
The share price reaction, although relatively muted, isn’t to be sniffed at. The recent GDP reading from the US was bleaker than expected, and didn’t lend itself well to growth-stock sympathism. To that end, the market’s reaction to these results mean more than in usual times.
While Microsoft is top dog, there are other companies snapping at its heels. None are close enough to take much of a bite just yet, but never say never. The market’s still at the very early stages of the AI race in the grand scheme of things, and it’s important to remember that defining the overall winner is a very difficult ask.”
