Microsoft saw an increase of 27% in its net income.
Microsoft shares surged 5% after hours on Tuesday as the software giant revealed greater-than-expected first-quarter results. The company reported earnings of $2.99 per share, higher than the $2.65 per share estimated by LSEG, formerly known as Refinitiv, and revenue of $56.52 billion, which surpassed the predicted $54.50 billion. Year-over-year, the net income saw a 27% increase to $22.29 billion and revenue grew 13%.
Analysts are of the opinion that corporate expenditures on cloud infrastructure for AI technologies is helping to drive the expansion, with a recent example being Microsoft-backed OpenAI's ChatGPT chatbot, released last year, which created a stir in the business world. Additionally, numerous organizations have been striving to reduce costs of workloads hosted in Microsoft Azure, which could obstruct any development in growth rate.
As a part of the quarter, Microsoft launched multiple cyber security services, announced new Surface PCs and said that the Microsoft 365 Copilot AI add-on, available at a fee of $30 per person per month, will be available for enterprises from 1st November. A possible effect on the earnings from this offer will be discussed in the conference call.
The completion of Microsoft's $68.7 billion acquisition of video game publisher Activision Blizzard earlier this month may potentially affect the earnings for the subsequent quarter, which will also be a point of discussion.
Microsoft shares have gained 38% as of this year while the S&P 500 index has risen around 11%. Executives will discuss the current results with analysts and issue guidance for the next quarter on a call starting at 5:30 PST.
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