Microsoft's Q2 Earnings: Cloud Revenue Miss Overshadows AI Growth

Microsoft Stock Slips as Intelligent Cloud Revenue Falls Short of Expectations

Microsoft (MSFT) shares moved lower after the close Wednesday as the tech giant reported fiscal second-quarter Intelligent Cloud revenue that missed analysts' expectations. The company saw revenue rise 12% year-over-year to $69.63 billion, surpassing the analyst consensus from Visible Alpha. Earnings came in at $24.11 billion, or $3.23 per share, compared to $21.87 billion, or $2.93 per share, a year earlier. That was also above expectations for the quarter ended Dec. 31. However, revenue from Microsoft's Intelligent Cloud segment, which includes its Azure cloud computing platform, slightly missing projections, rising 19% to $25.54 billion. Total Azure revenue for the quarter approached $41 billion, the company said. Shares of Microsoft fell less than 2% in extended trading Wednesday. The stock, which also rose during today's regular session, had gained about 5% so far in 2025 through Wednesday's close. CEO Satya Nadella said in a statement that Microsoft's AI revenue run rate rose to $13 billion. The results come with Microsoft-backed OpenAI in focus this week after the surging popularity of an app from Chinese startup DeepSeek, which runs on an AI model it claimed can perform on par with American rivals at a fraction of the cost, raised concerns about the competitiveness of U.S. firms and their spending. Raymond James and Bank of America analysts said that DeepSeek's advances could push Microsoft, along with Alphabet's (GOOGL) Google and Amazon (AMZN), to act with greater urgency. OpenAI is also involved with Stargate, an AI infrastructure-building joint venture with Oracle (ORCL) and SoftBank announced earlier this month. The companies said they would commit $100 billion to start, and as much as $500 billion over the next four years.

Microsoft Shares Slide After Q2 Results, Cloud Revenue Misses Expectations: Details - Microsoft (NASDAQ:MSFT)

Quarterly revenue clocks in at $69.6 billion, beating the $68.78 billion analyst consensus estimate. Microsoft Corp. MSFT reported its second-quarter financial results after Wednesday's closing bell. Here's a look at the key figures from the quarter. The Details: Microsoft reported quarterly GAAP earnings of $3.23 per share, beating the $3.11 consensus estimate. Quarterly revenue clocked in at $69.6 billion, beating the $68.78 billion analyst consensus estimate. Read Next: Robert Kennedy Jr. Faces Senate Confirmation Hearings As Bird Flu Concerns Grow: Caroline Kennedy Says Cousin 'Predator' Unfit For Office Revenue in Microsoft's Intelligent Cloud segment was $25.5 billion and increased 19%. Within Intelligent Cloud, server products and cloud services revenue increased 21% driven by Azure and other cloud services revenue growth of 31%. Revenue in the Productivity and Business Processes segment was $29.4 billion, an increase of 14%. Revenue in More Personal Computing was relatively unchanged at $14.7 billion. Microsoft's capital expenditures were $22.6 billion in the second quarter. "We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead," said Satya Nadella, CEO of Microsoft. "Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year." "This quarter Microsoft Cloud revenue was $40.9 billion, up 21% year-over-year," said Amy Hood, executive vice president and CFO of Microsoft. "We remain committed to balancing operational discipline with continued investments in our cloud and AI infrastructure." Microsoft will host a conference call to discuss the results and provide forward-looking guidance at 5:30 p.m. ET. MSFT Price Action: According to data from Benzinga Pro, Microsoft shares are down 1.43% after-hours at $436.32 on Wednesday. Read Next: Rigetti Computing, Quantum Stocks Soar On Project Stargate Photo: Shutterstock MSFTMicrosoft Corp$439.06-1.82%Overview Rating:Good62.5%Technicals Analysis1000100Financials Analysis400100WatchlistOverviewMarket News and Data brought to you by Benzinga APIs