Microsoft’s profits rise by 33% thanks to investments in artificial intelligence and cloud computing

Microsoft’s profits rise by 33% thanks to investments in artificial intelligence and cloud computing

Microsoft said its profits for the October-December quarter rose 33%, helped by its significant investments in artificial intelligence technology.

The company reported net income for the quarter of $21.87 billion, or $2.93 per diluted share, beating Wall Street expectations of $2.79 per share. The Redmond, Wash.-based software maker reported revenue of $62.02 billion in the quarter, up 18% from $52.75 billion a year earlier, also beating expectations.

“Microsoft is firmly positioning itself as a leader in the AI ​​race,” said Jeremy Goldman, director of briefings at Insider Intelligence. In addition to other benefits, Goldman suggested that AI technology could help expand Microsoft’s share of digital advertising. His company expects Microsoft’s worldwide ad revenue to grow 12% this year to $14.93 billion, but also notes that Google is expected to expand its much larger advertising business by 10% in the same period.

Analysts surveyed by FactSet Research expected Microsoft to generate revenue of $61.14 billion, and currently expects revenue of $60.97 billion for the January-March quarter. These results are the first to include the financial resources of video game maker Activision Blizzard, which Microsoft officially acquired on October 13 for $69 billion.

This merger boosted Microsoft’s revenue growth by four points, according to James Ambrose, the company’s director of investor relations. But he said it also reduced operating profit by about $440 million as a result of purchasing account adjustments and integration and transaction costs.

Microsoft shares initially fell in after-hours trading, falling nearly 2% to $400.86, though they later recovered much of that loss. Analysts noted that investors were initially concerned about Microsoft’s continued aggressive investment plans.

Microsoft’s cloud-focused business has outpaced its other divisions, with revenue expanding 20% ​​from the same time last year to $25.88 billion during the quarter.

Revenue from the company’s Office suite of email and other workplace products, as well as professional social network LinkedIn, grew 13% to $19.25 billion during the quarter.

The Windows-led personal computing business, which includes the company’s video games and Xbox services, grew 19% to $16.89 billion. These numbers reflect the huge impact of Activision Blizzard’s addition to the sector. Microsoft’s Xbox-related revenue rose 61% in the quarter, although the company attributed 55 points of that figure to the addition of Activision, known for producing the highly successful Call of Duty game series.

(Tags for translation)Cloud Computing

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