Despite the cloud business missing expectations, Microsoft's overall revenue still rose by 21% year over year, and Intelligent Cloud revenue increased by 19%. The company also reported that AI services contributed to 8% growth in its Azure and other cloud services revenue, which increased by 29%. The report follows Alphabet’s earnings announcement last week, which highlighted an increase in cloud revenue partially due to interest in AI products. However, Google did not provide specific numbers on the impact of AI on the cloud business.
Key takeaways:
- Microsoft reported fiscal fourth quarter earnings per share (EPS) of $2.95 on revenue of $64.7 billion, beating Wall Street's expectations.
- However, the company missed on cloud revenue expectations, with Intelligent Cloud revenue, which includes Azure services, falling short at $28.5 billion versus expectations of $28.7 billion.
- Despite the miss on cloud revenue, Microsoft's overall revenue still rose 21% year over year, and Intelligent Cloud revenue increased 19% year over year.
- Microsoft's AI services contributed to its Azure and other cloud services revenue growth, but the AI miss sent shares of fellow AI-heavy companies like Meta lower in after-hours trading.