Microsoft posts $70B revenue fueled by AI growth, beats expectations
What's the story
Microsoft has posted a strong quarterly earnings report, beating Wall Street's expectations for the fourth straight quarter.
The tech giant posted a revenue of $70.07 billion and earnings of $3.46 per share, beating analyst expectations of $68.42 billion.
Following the news, Microsoft's shares jumped over 5% in after-hours trading on Wednesday.
AI investment
$80 billion investment in AI this fiscal year
The earnings report serves as a litmus test for Microsoft's artificial intelligence (AI) business. The company has pledged to invest about $80 billion into AI this fiscal year alone.
The massive investment comes even as Microsoft recently decided to cut some data center leases.
Over the last few years, Microsoft has also pumped billions into OpenAI, acquiring a large stake in the ChatGPT's creator.
AI future
Microsoft executives advocate for an AI-driven future
Microsoft's massive bets on AI have left the company and its investors reliant on the technology's success and adoption.
Microsoft has framed its AI investments as a move toward spearheading a world-changing technology, key to America's industrial future.
"Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth," CEO Satya Nadella said.
Azure growth
Azure revenue exceeds analyst expectations
Last quarter, Microsoft reported a 12% increase in revenue and a whopping 175% YoY growth in its AI business.
The performance of Microsoft's Azure cloud computing service was also keenly watched by investors following a dip in revenue last quarter.
However, the company revealed that Azure's revenue surpassed analyst expectations, growing by 33% YoY.