To The Moon

$微软(MSFT)$ saw accelerated growth in its cloud business, driving by artificial intelligence. While the Q3FY24 performance exceeded expectations, the company provided revenue guidance for the next quarter that was lower than expected.

Key Metrics:

• Earnings Per Share: $2.94, beating expectations of $2.82

• Revenue: $61.86 billion, surpassing expectations of $60.8 billion

Intelligent Cloud exceeds expectations, AI drives Azure growth:

Microsoft's total revenue for the third quarter was $61.86 billion, a 17% year-over-year increase, with a net profit of approximately $21.94 billion, representing a growth of about 20%. Operating profit increased by 23% to $27.6 billion.

The Intelligent Cloud business segment, including Azure, saw a revenue increase of 21% to $26.7 billion, surpassing the market's expected $26.25 billion and exceeding the previous quarter's growth rate of 20.4%.

• Specifically, revenue from Azure and other cloud services grew by 31%, outperforming the market's expected growth of 28.6%. AI is driving accelerated growth in cloud revenue. The report indicated that AI contributed to a 7% increase in Azure revenue, higher than the 6% in the previous quarter and 3% in the third quarter of last year.

The Productivity and Business-processes business, including Copilot, saw quarterly revenue increase by 12% to $19.6 billion, also exceeding the expected $19.54 billion.

• Revenue from Office 365 commercial, including Copilot, grew by 15% during the quarter, leading to a 13% increase in overall revenue from Office business products and cloud services.

In More Personal Computing business, including Xbox, Windows systems, and Surface, quarterly revenue increased by 17% to $15.6 billion, higher than the market's expected $15.07 billion but lower than the previous quarter's $16.89 billion.

For the next quarter, revenue is expected to be $64 billion, representing a year-over-year growth rate of approximately 14%, lower than the consensus expectation of $64.5 billion.

However, Azure and other cloud services is expected to grow by 30% to 31%, similar to the strong results seen in the third quarter, driven by Azure and AI contributions. However, growth in the Microsoft 365 suite may continue to slow due to the scale of the installation base.

Overall, Microsoft's report was not as impressive as Google's, with slightly lower guidance. However, due to the pre-earnings price drop, the overall effect of AI exceeded expectations, leading to a significant increase in stock price after the earnings report.