Technology giant Microsoft has reported strong quarterly earnings, with revenue rising by 13% to $70.1 billion, fueled by impressive growth in its cloud computing and artificial intelligence (AI) segments.
The company’s performance surpassed analyst expectations, sending Microsoft stock surging by over eight percent in after-hours trading.
AI and Cloud Lead the Way
Marking its 50th anniversary, the Redmond-based tech giant posted a net profit of $25.8 billion, an 18% increase compared to the same quarter last year.
Microsoft Cloud revenue climbed to $42.4 billion, reflecting a 20% year-over-year increase. Chief Financial Officer Amy Hood credited this to “continued demand for our differentiated offerings.”
The company’s Intelligent Cloud segment, which includes its flagship Azure service, saw revenue reach $26.8 billion, up 21%, while Azure and other cloud services reported a 33% surge—a clear signal of strong enterprise adoption of Microsoft’s cloud platforms.
Strategic AI Investments
A pioneer in embracing AI early, Microsoft capitalized on the momentum generated by the launch of ChatGPT in 2022. Its extensive investment in AI infrastructure is now showing tangible returns.
In January, the company revealed plans to invest $80 billion into capital and infrastructure in the current fiscal year.
While discussing spending plans, CEO Satya Nadella stated: “I feel very, very good about the pace” of investments, but acknowledged the need to adjust spending priorities. He also emphasized the urgency of securing adequate power for AI data center operations.
In a strategic shift, Microsoft announced that its partnership with OpenAI is evolving. The tech giant will no longer be the exclusive cloud provider for OpenAI’s computing needs, though it remains a key infrastructure supporter.
Business Units Perform Solidly
Beyond cloud and AI, Microsoft’s Productivity and Business Processes division—which includes Office 365 and LinkedIn—generated $29.9 billion in revenue, up 10%.
The company also returned $9.7 billion to shareholders through dividends and share buybacks this quarter.
“This was a strong, steady quarter from a company that’s matured into its AI moment,” said Jeremy Goldman of Emarketer. Despite industry uncertainties, he added, “Microsoft’s ability to turn AI enthusiasm into real revenue… sets it apart in a field crowded with promise but short on payoff.”
Outlook Remains Strong
Microsoft reassured investors with a positive outlook, despite global economic uncertainties and US trade policies. Unlike many tech peers, the company has maintained a lower political profile while focusing on business resilience.
As AI growth continues to reshape the tech landscape, Microsoft’s leadership in both cloud computing and enterprise AI positions it firmly at the forefront of the digital transformation era.
