After investing billions in artificial intelligence, the world’s largest public company reports revenue of $61.86 billion
Microsoft’s profits exceeded Wall Street’s expectations, fueled by its significant investment in artificial intelligence. The tech giant has poured billions into AI, aiming to accelerate growth, especially in its cloud computing services, which saw a more than 20% revenue increase. According to Satya Nadella, Microsoft’s CEO, the company’s AI tools are ushering in a new era of AI transformation, leading to improved business outcomes across various roles and industries.
As the company hastens to incorporate AI into its software and services, Nadella noted that its Azure cloud computing division experienced double-digit percentage growth in deals worth $100 million and $10 million. Additionally, Microsoft has begun offering its Copilot AI software add-on to small businesses.
Microsoft’s total revenue rose by 17% to $61.86 billion in the first three months of 2024, the third quarter of its fiscal year, surpassing analyst expectations of around $60.88 billion. Earnings per share also increased by 20% to $2.94, ahead of the expected $2.83. Following these results, the company’s shares increased by 4% during after-hours trading in New York on Thursday.
Microsoft, valued at nearly $3 trillion in the stock market, holds the title of the world’s largest public company. Its shares have climbed by more than 30% over the past year, a notable increase though not as high as Amazon’s and Google’s, whose stocks have surged by over 60% and 40%, respectively.
By investing billions in the ChatGPT developer OpenAI, Microsoft aims to position itself at the forefront of AI’s ascension, becoming a magnet for the industry’s premier talent. In March, the company made headlines by hiring Mustafa Suleyman, a co-founder of Google’s Deepmind AI subsidiary, along with a co-founder of the $4 billion startup Inflection AI and several of its employees.
In November, following the removal of its co-founder and chief executive, Sam Altman, from OpenAI’s board, he initially announced his intention to move to Seattle and join Microsoft, a significant win for Nadella. Most of OpenAI’s employees indicated they would follow Altman, potentially leading to the company’s collapse. However, Altman was reinstated as chief executive a few days later.
Microsoft is currently seeking to capitalize on its leading position in this field. According to Yahoo Finance, the company announced in the last months of 2023 that AI contributed 6% to the revenue growth in its Azure cloud computing division, up from 3% in the previous quarter.
The company announced on Thursday that AI enhancements to LinkedIn have boosted engagement on the professional social network. Nadella highlighted LinkedIn’s AI tools for composing posts and articles, attributing an 11% growth in LinkedIn sessions to their use. According to Microsoft’s press release, revenue from LinkedIn increased by 10%.
Microsoft has been securing a series of prominent AI deals. Just two days before this week’s earnings report, the company revealed that Coca-Cola had entered a five-year, $1.1 billion agreement with Azure for AI and cloud computing services. Last month, Microsoft announced a partnership with the AI startup Mistral to provide access to the French company’s models on Azure.