Microsoft has released its Q3 report, which was positive enough to cause a 7% increase in its share price yesterday. The tech-giant reported earnings per share of $2.45 per share compared to estimations of $2.23 per share, and also beat revenue expectations – logging $52.85bn against expectations of $51.02bn.
Net income had also logged a 9% increase to reach $18.3bn from $16.73bn a year prior, and its reported revenue marks a 7% increase from the year prior. One of the biggest surprises contained in the report was the performance of its cloud business unit. The segment’s revenue came in at an impressive $22.08bn, which was 16% higher than what was expected by analysts.
What’s next for Microsoft?
Microsoft’s CFO has said the company expects AI to be a major growth factor, after announcing a $10bn investment in OpenAI, the developer of ChatGPT, at the start of the year. The company noted demand for AI related products to be growing, and expects this to translate into growing revenue in the year to come. The bad news for Microsoft came in the form of Windows OS sales, which had declined significantly by 28%. Additionally, UK antitrust watch dogs just blocked its intended $69bn deal to acquire Activision Blizzard.
The tech sector saw the Q3 report as such a positive signal that the Nasdaq saw gains yesterday – although most of those gains have since been lost. Macroeconomic headwinds are continuing to put pressure on consumer spending habits and global demand for PCs is estimated to have fallen by over 30% since 2022. This has the potential to put a dampener on Microsoft’s recovery.
(About Microsoft)
Microsoft is an American multinational technology company that develops, licenses, and sells computer software, consumer electronics, and personal computers. The company was founded in 1975 by Bill Gates and Paul Allen and is headquartered in Redmond, Washington. Microsoft is best known for its Windows operating system, which is used on most personal computers worldwide. The company also produces other software such as Microsoft Office Suite, Microsoft Edge web browser, and the Xbox gaming console. In addition to software, Microsoft also manufactures and sells hardware products such as the Microsoft Surface line of tablets and laptops. Microsoft has diversified its business interests in recent years and has expanded into areas such as cloud computing and artificial intelligence. The company is one of the largest in the world by market capitalization.
