Microsoft is set to announce its fiscal fourth-quarter earnings, with analysts predicting earnings per share of $2.93 and revenue of $64.39 billion. This represents a 15% increase in revenue from the previous year, slightly lower than the 17% expansion seen in the prior quarter. Unlike Google’s parent company Alphabet, which experienced a slowdown in growth, Microsoft is anticipated to see its strongest growth in the cloud computing sector.
Analysts are expecting a 30% revenue growth from Azure and other cloud services, a slight decrease from the 31% growth reported in the previous quarter. Microsoft does not disclose Azure revenue figures, but analysts predict that artificial intelligence services will contribute significantly to this growth. Evercore ISI analysts believe that 7.8 points of Azure’s growth will be driven by AI services, showcasing an increase from the previous quarter.
The PC market’s improvement might offer some relief to Microsoft’s Windows operating system business, which saw a decline last year due to the pandemic-induced computer buying spree. According to Gartner, PC shipments grew by 1.9% in the fiscal fourth quarter, compared to 0.9% growth in the prior period. Microsoft introduced Surface PCs with AI capabilities that can run certain models locally, enhancing the user experience without relying on an internet connection. Other manufacturers like Dell and HP have also introduced similar AI-enhanced devices, known as Copilot+ PCs.
Microsoft’s shares have increased by approximately 14% year-to-date, slightly lagging behind the S&P 500 index’s growth of 15%. The company’s executives will provide further insights into the earnings report and issue guidance during a conference call with analysts at 5:30 p.m. ET. CEO Satya Nadella has expressed optimism about the company’s future, emphasizing the joy and creativity that Microsoft aims to bring back to the PC industry.
Microsoft’s quarterly earnings report will shed light on its performance across different sectors, with cloud computing and AI services expected to be key drivers of growth. The company’s focus on innovation and user experience, as seen in its AI-powered PC features, indicates a strategic approach to staying competitive in the tech industry. Investors and analysts will eagerly await the earnings call for further details on Microsoft’s financial outlook and market positioning.
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