Microsoft’s cloud business keeps profits flowing in tougher times

by admin
0 comment

Microsoft released its results on Tuesday (24 January), showing some strength in the face of a weak economy fueled by cloud businesses meeting their Wall Street targets for the end of 2022. The current quarter may disappoint.

A relatively stable outlook will help allay concerns that the lucrative cloud segments of big tech companies could take a big hit as customers look to cut spending, reported Tuesday. Fiscal Q2 cloud revenue compensated for weakness in the PC unit.

TECHnalysis Research Chief Analyst Bob O’Donnell said:

Microsoft joins Other big tech companies It announced last week that it is eyeing layoffs to help it through difficult times. had cut more than 10,000 jobs. Second quarter earnings beat Wall Street expectations.

According to Refinitiv, third-quarter revenues for so-called intelligent cloud businesses are expected to be between $21.7 billion and $22 billion, just below the average analyst forecast of $22.14 billion. Second quarter revenue for this segment was slightly above expectations at US$21.5 billion.

Cloud business is back in the spotlight following the viral success of ChatGPT, a chatbot that uses artificial intelligence to answer common questions in plain language. The bot was created by his OpenAI, a startup in which Microsoft has invested heavily and needs powerful cloud computing services.

Brett Iversen, Head of Investor Relations at Microsoft, said of OpenAI: In the future, revenue from OpenAI-related business will be reflected in revenue from Microsoft’s cloud service Azure.

On the earnings call, CEO Satya Nadella said it’s too early to separate AI contributions from Azure cloud workloads.

Revenue for Azure cloud products in the second quarter increased 31%, in line with estimates compiled by Visible Alpha. It is steadily gaining market share from leader Inc’s Amazon Web Services (AWS).

BofA Global Research estimates that Azure will end 2022 with a 30% share of the cloud computing market, up from 20% in 2018. Over the same period, AWS dropped from his 71% to 55%.

According to Refinitiv IBES, Microsoft’s revenue rose 2% to $52.7 billion in the three months ended Dec. 31, compared to the average analyst estimate of $52.94 billion. Net earnings fell 12% to US$16.4 billion, according to Refinitiv calculations, but adjusted earnings per share were US$2.32, beating Wall Street’s consensus forecast of US$2.29.

Revenue from Microsoft’s More Personal Computing segment, which includes Windows, devices and search revenue, fell 19% to US$14.2 billion as the PC market continued to shrink. The company expects revenue to fall from his $11.9 billion to $12.3 billion in the third quarter of this year.

You may also like

Leave a Comment