Microsoft shares climb almost 9% as AI, cloud lead earnings strength
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Microsoft (NASDAQ:MSFT) shares surged by almost 9% in after-hours trading as the software giant reported fiscal third-quarter results that surpassed expectations and suggested growing strength in its AI and cloud businesses.
For the quarter ending March 31, Microsoft (MSFT) earned $2.45 a share, on revenue of $52.9B, compared to a profit of $2.22 a share, on $49.4B in sales in the same period a year ago.
Wall Street analysts had forecast Microsoft (MSFT) to earn $2.23 a share on revenue of $51B.
In a statement, Microsoft (MSFT) Chief Executive Satya Nadella said that the company's results show the beginning of "a new era of computing" where "The world's most advanced AI models are coming together with the world's most universal user interface -- natural language."
Microsoft (MSFT) has been one of the tech giants taking the lead in AI due to its investment in , and work with ChatGPT developer OpenAI.
Among Microsoft's (MSFT) main business groups, productivity and business services, which includes commercial and consumer products and cloud services, reported $17.5B in revenue, an 11% increase from a year ago. Intelligent cloud revenue rose 16%, to $22.1B, while more personal computing, which including products likes XBox content and services, and Windows commercial products, saw sales decline by 9%, to $13.3B.
Prior to Microsoft's (MSFT) results, reports came out saying that the company is planning to close its $69B acquisition of Activision (ATVI) despite an FTC lawsuit against the deal.