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Microsoft (MSFT) shares surged after it announced its fiscal third-quarter earnings, surpassing analysts' estimates, driven by robust performance in its cloud computing business. CEO Satya Nadella highlighted the transformative impact of Microsoft Copilot and Copilot stack in ushering in a new era of AI transformation across various industries. The company also said it anticipates Q4 revenue of between $63.5 billion and $64.5 billion, just a head of analysts' expectations of $64.7 billion.
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Microsoft's AI services contributed significantly to Azure and other cloud services revenue, with a notable increase from previous quarters, underscoring the growing demand for AI-driven solutions. Shares of Microsoft rose about 2% on Friday, with strong performance reported in overall commercial cloud revenue and across Productivity and Business Processes, Intelligent Cloud, and More Personal Computing segments.
Why it matters
Microsoft's AI initiatives received a boost with a significant agreement with Coca-Cola and strategic hires to bolster its AI division.