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The stellar earnings reports from both tech giants assuaged concerns regarding the profitability of their significant AI investments, following Meta's tepid forecast.
Microsoft Corp beats Q2 revenue estimates with 18% growth driven by new AI features attracting customers to its cloud and Windows services. Microsoft shares fell 1% in after-hours trading but climbed 57% last year. Revenue at Microsoft's Intelligent Cloud unit, including Azure, grew 20% to $25.9 billion.
Microsoft: "We've moved from talking about AI to applying AI at scale," CEO Satya Nadella said in a statement. "By infusing AI across every layer of our tech stack, we're winning new customers and helping drive new benefits and productivity gains across every sector."
Microsoft reported strong sales in its latest quarter, with $56.5 billion in sales, up 13% from a year earlier. Profit reached $22.3 billion, up 27%, beating analyst expectations. The company's investments in generative artificial intelligence (AI) were starting to boost sales, particularly in the cloud computing sector.
Tech's propping up of the market had raised concerns that the gains could be on somewhat shaky ground if companies couldn't deliver actual results.