Sign up to save tools and stay up to date with the latest in AI
bg
bg
1

Microsoft falls after reporting slowing growth in cloud business

Jan 29, 2025 - financialpost.com
Microsoft Corp. reported a slowdown in its cloud-computing business growth for the last quarter of 2024, with Azure's revenue increasing by 31%, slightly below analysts' expectations of 32%. Despite this, Microsoft continues to invest heavily in AI infrastructure, planning to spend $80 billion this fiscal year on AI data centers. The company is a leader in AI commercialization, partnering with OpenAI and launching several Copilot-branded AI assistants. However, monetizing these products is taking longer than anticipated, raising concerns among investors about the significant capital expenditures, which reached $22.3 billion for the quarter.

Microsoft's total revenue for the quarter rose 12% to $69.6 billion, with a profit of $3.23 per share, surpassing analysts' estimates. AI contributed significantly to Azure's growth, accounting for 13 percentage points in the second quarter. Despite the positive financial results, Microsoft's shares fell about 4% in extended trading due to concerns over its substantial spending and competition from new AI models like DeepSeek. Additionally, regulatory scrutiny is increasing, with the FTC investigating potential antitrust issues related to Microsoft's partnership with OpenAI.

Key takeaways:

  • Microsoft reported a slowdown in growth for its cloud-computing business, with Azure's revenue increasing by 31% compared to 34% in the previous quarter.
  • The company is heavily investing in AI infrastructure, expecting to spend US$80 billion this fiscal year on AI data centers.
  • Microsoft's AI revenue is projected to reach US$13 billion annually, with AI contributing significantly to Azure's growth.
  • Shares fell about four percent in extended trading due to concerns over high capital expenditures and competition from new AI models like DeepSeek.
View Full Article

Comments (0)

Be the first to comment!