Analysts were not delighted that Microsoft may not observe substantial gains in artificial intelligence gains this year. Amy Hood, Microsoft's financial head, mentioned on Wednesday that the expansion should begin to be visible during the initial six months of next year.Shares of Microsoft fell as much as 5% Wednesday, following the release of the company's quartery earnings report which included worse-than-expected revenue guidance. Despite this, analysts remain optimistic, citing Microsoft's investment in artificial intelligence (AI) as potential impetus for its two largest businesses, the Azure public cloud and the Office productivity software. Microsoft has been allocating capital expenditures to get the necessary infrastructure in place for AI services, but this spending has impacted Microsoft's cloud gross margin. On Tuesday's call, Microsoft's Finance Chief Amy Hood noted that the effects of AI growth would mainly be seen in the second half of the 2024 fiscal year. Analysts agree that although the revenue gains may not come as quickly as hoped for, Microsoft is well-positioned to take share of the market in the coming years. CEO Satya Nadella commented that Microsoft's lead in AI workloads in the cloud remains unblemished.
Microsoft shares dropped as much as 5% on Wednesday, following the announcement of their quarterly earnings report that included lower-than-expected revenue guidance. Despite the company's downbeat forecast, many analysts stayed optimistic, citing Microsoft's investments in AI as a potential driver for its two largest businesses, Azure public cloud and Office productivity software. To accommodate these services, Microsoft has been increasing capital expenditures, which has had an effect on its cloud gross margin. Amy Hood, the company's financial chief, noted that AI growth would predominantly be seen in the latter half of 2024. Analysts believe that although revenue gains may not arise as soon as hoped, Microsoft's leadership in AI within the cloud will serve them well in the coming years. CEO Satya Nadella conclusively expressed his confidence in Microsoft's unmarred lead in this domain.
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