Microsoft has reported a significant surge in quarterly profits, fueled by the continued growth of its cloud computing and artificial intelligence (AI) businesses. The tech giant announced on Wednesday that it earned $27.2 billion in profit on revenue of $76.4 billion in the most recent quarter, beating Wall Street expectations and reaffirming its dominance in the evolving tech landscape.
A substantial portion of the revenue, $29.9 billion, was generated by Microsoft’s Intelligent Cloud division, underscoring the company’s stronghold in enterprise cloud services and the increasing demand for AI-powered solutions.
“Cloud and AI are the driving force of business transformation across every industry and sector,” said Microsoft CEO Satya Nadella in the earnings release. “We’re innovating across the tech stack to help customers adapt and grow in this new era.”
For the fiscal year ending June 30, Microsoft’s Azure cloud platform brought in more than $75 billion, marking a 34% increase from the previous year. The results drove Microsoft shares up by nearly 7% in after-hours trading, signaling strong investor confidence.
“This was a slam-dunk quarter for Microsoft,” said Dan Ives, analyst at Wedbush Securities. “Cloud and AI are driving significant business transformation across every sector and industry. The company continues to capitalize on the AI revolution.”
Microsoft has been a front-runner in the AI race since the launch of ChatGPT in 2022, rapidly integrating AI capabilities into its products and investing heavily in the infrastructure needed to support large-scale AI operations. In January, the company announced plans to invest approximately $80 billion into capital and infrastructure in the fiscal year, with a major focus on expanding data centers and securing power sources to meet AI demands.
Despite its strong financial performance, Microsoft has also taken steps to streamline operations. Earlier this month, the company reduced its global workforce by just under 4%, citing the need to eliminate layers of middle management and improve organizational agility. These cuts followed a previous round in May, which saw around 6,000 jobs eliminated.
“We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said.
Microsoft emphasized that its long-term vision is centered on empowering employees and customers through AI, aiming to free up time for more meaningful and impactful work.
As Microsoft advances its plans to embed AI into every product and service, analysts say the company is strategically positioned to remain a dominant force in the rapidly transforming digital economy.
Written By Rodney Mbua
