Microsoft (MSFT) will report third-quarter earnings after the bell on Thursday, as Wall Street continues to look for signs that the AI explosion is more than just hype. In the previous quarter, Microsoft reported that its AI capabilities contributed 6 percentage points to the company’s Azure revenue growth, up from 3% in the prior period, and analysts expect more.
Microsoft shares are up more than 10% year to date, trailing rivals such as Google parent Alphabet (GOOG, GOOGL) and Amazon (AMZN), which are up 15% and 22%, respectively. Over the past 12 months, Microsoft shares have risen 32%, Amazon shares have risen 67% and Google shares have risen 47%.
The three companies are competing to see which can deliver the most comprehensive AI solutions to enterprise and customer customers, whether that means making heavy investments in third-party companies like OpenAI and Anthropic or reorganizing their teams. internal like Google.
For the quarter, Wall Street is calling for Microsoft to report earnings per share of $2.83 on revenue of $60.88 billion, according to analyst estimates compiled by Bloomberg. During the same period last year, Microsoft reported EPS of $2.45 on revenue of $52.86 billion.
Analysts expect Microsoft to report overall commercial cloud revenue of $33.93 billion in the quarter, an increase of 19% year-over-year. In terms of business segments, Wall Street expects Microsoft to report $19.54 billion in Productivity and Business Process revenue, $26.25 billion in Cloud revenue smart and a turnover of 15.07 billion dollars for more personal computing.
Microsoft’s AI ambitions got a boost Tuesday when it announced that Coca-Cola (KO) had signed a five-year, $1.1 billion deal to use Azure cloud services and AI technology. AI from the software giant.
“Through our long-term partnership, we have made significant progress to accelerate system-wide AI transformation across The Coca-Cola Company and its network of independent bottlers around the world” , said Judson Althoff, executive vice president and chief commercial officer of Microsoft, in a statement.
Microsoft has launched a torrent of new AI features and services for its business and productivity apps and consumer platforms since launching its revamped Bing and AI chatbot in February 2023.
In March, Microsoft announced that it had hired Mustafa Suleyman, co-founder of DeepMind AI and Inflection AI, Karén Simonyan, co-founder of Inflection AI, as well as a number of company staff. Suleyman takes on a new role at Microsoft as CEO of the Microsoft AI division.
In February, Microsoft announced a multi-year partnership with French AI startup Mistral that would allow Microsoft to offer the company’s services…
