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Microsoft's stock price increased following the release of their third-quarter financial results and quarterly projections, which exceeded analysts' expectations. Refinitiv reported earnings of $2.45 per share, surpassing the anticipated $2.23 per share. Additionally, Microsoft's revenue of $52.86 billion exceeded the expected $51.02 billion. During a conference call with analysts, Microsoft's finance chief Amy Hood predicted a revenue range of $54.85 billion to $55.85 billion for the fourth quarter of the fiscal year.
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Microsoft's Intelligent Cloud division, comprising Azure public cloud, Enterprise Services, SQL Server, and Windows Server, earned $22.08 billion in revenue. While Azure and other cloud services experienced a growth of 27%, this was slightly lower than the previous quarter's growth of 31%. According to CEO Nadella, the More Personal Computing division, which includes Windows, Bing, Xbox, and Surface, generated revenue of $13.26 billion. This is a 9% decline, but it still exceeded the StreetAccount consensus of $12.25 billion. Bing has surpassed 100 million daily active users, and gaming subscriptions brought in nearly $1 billion in revenue.
Why it matters
In the quarter, Microsoft announced a new multi-billion dollar investment in OpenAI, with the aim of using their AI models to enhance Bing search engine and Microsoft 365 productivity software. According to a Microsoft representative, the positive feedback and demand signals from their current AI capabilities are encouraging, and they plan to continue investing in their cloud infrastructure, specifically in AI-related spending to meet the growing demand driven by customer transformation. As a result, they anticipate revenue growth over time.
