Profits at Microsoft beat Wall Street’s expectations as its heavy bet on artificial intelligence continued to bear fruit in the second quarter. The

Microsoft’s heavy bet on AI pays off as it beats expectations in second quarter

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2024-04-26 00:30:02

Profits at Microsoft beat Wall Street’s expectations as its heavy bet on artificial intelligence continued to bear fruit in the second quarter.

The technology giant has invested billions of dollars into AI in a bid to turbocharge its growth, particularly of its cloud computing services. Its cloud computing revenue surged by more than 20% in the latest quarter.

Microsoft’s AI tools “are orchestrating a new era of AI transformation, driving better business outcomes across every role and industry,” said Satya Nadella, the chief executive of Microsoft.

As the group races to integrate AI across its software and services, Nadella said its Azure cloud computing business saw the pace of deals worth $100m and $10m increase by double-digit percentages. It has also started selling its Copilot AI software add-on to small businesses.

Total revenue at Microsoft increased 17% to $61.86bn during the first three months of 2024, the third quarter of its financial year, surpassing analyst expectations of some $60.88bn. Earnings per share increased 20% to $2.94, ahead of the expected $2.83.