Microsoft and Meta Lead Tech Rally with Strong AI-Driven Earnings

Microsoft just made the AI bull case a whole lot stronger

Microsoft (MSFT) didn't just beat expectations in its fiscal third quarter -- it delivered what Wedbush dubbed an "Aaron Judge-like" performance that could help reset the narrative around AI monetization. Revenue hit $70.1 billion, up 13%, with Azure and other cloud revenue growing 33% year-over-year, a better clip than some analysts predicted. Nearly half of that cloud growth came from AI workloads. Here are key takeaways investors are digesting Thursday morning: On the earnings call, executives offered a confident and detailed account of accelerating enterprise demand. CFO Amy Hood emphasized that while most of the quarter's upside came from non-AI services, digital-native companies are increasingly building everything -- AI or not -- in Azure. The result: a seamless pipeline converting Microsoft's massive capital expenditures into revenue faster than skeptics expected. Commercial bookings jumped 17% in constant currency, while Microsoft's commercial remaining performance obligation (i.e., revenue that the company is contractually owed but hasn't collected yet) surged 34% to $315 billion. That growing backlog signals a strong pipeline of future revenue. Management cited enterprise wins, including Coca-Cola (KO), BNY Mellon (BK), and Abercrombie & Fitch (ANF), and noted that Microsoft now processes over 100 trillion tokens per quarter. Its internal Foundry AI platform has 70,000 enterprise developers onboard. Cost and efficiency metrics also impressed. The cost per token (a key AI efficiency stat) has more than halved, while AI performance across Microsoft's data center fleet is up 30% on the same power footprint. Capital expenditures came in slightly below some forecasts, but Microsoft reaffirmed its $80 billion full-year FY25 guidance and expects spending to climb again in FY26 to meet hyperscale demand. Wedbush raised its price target on the stock 8.4%, from $475 to $515, noting that chatter around potential data center pullbacks is now "put to rest." As the line between AI and non-AI workloads continues to blur -- and AI demand proves strong even amid an uncertain macro picture -- Microsoft looks to be increasingly positioning itself as the core infrastructure provider of the AI era. In other words, hyperscaling has arrived -- and it seems here to stay. Microsoft shares are up 9% heading into Thursday's market open, while Nasdaq futures are climbing 1.7%, and the S&P is up over 1%.

[12]

Microsoft stock surges 9% as Azure earnings smash expectations and the AI boom rolls on

The stock was up about 9% in mid-morning trading. It's now up about 3% so far this year, having fully recovered from April's trade war-induced bloodbath in tech stocks. Microsoft racked up $70.1 billion in revenue, up 13%, and $25.8 billion in net income, up 18%, fueled by relentless demand for cloud and AI. Earnings came in at $3.46 per share, easily topping consensus estimates of $3.22. Microsoft's quarter drew gushing praise from analysts both on and off the earnings call, with Wedbush calling it "an Aaron Judge-like performance" (referring to the New York Yankees slugger). Azure beat both the Street and internal targets, with AI workloads accounting for nearly half the cloud platform's growth. The company reaffirmed its $80 billion FY25 capital expenditures forecast and said infrastructure investments will continue to rise in FY26 -- putting to rest speculation about data center cutbacks. Microsoft's cloud engine kept roaring in Q3, with Azure and other cloud services surging 33% year-over-year, powering a 21% increase in the all-important Intelligent Cloud segment, which hit $26.8 billion. Server product revenue rose 22% as demand for AI infrastructure stayed hot. The Productivity and Business Processes segment brought in $29.9 billion, up 10% from last year, driven by steady growth in Microsoft 365 and Dynamics. Microsoft 365 Commercial revenue rose 11%, with its cloud-based suite climbing 12%, while consumer revenue grew 10%. Dynamics 365 jumped 16%, lifting Dynamics overall by 11%. On an earnings call, executives offered a confident and detailed account of accelerating enterprise demand. CFO Amy Hood emphasized that while most of the quarter's upside came from non-AI services, digital-native companies are increasingly building everything -- AI or not -- in Azure. The result: a seamless pipeline converting Microsoft's massive capital expenditures into revenue faster than skeptics expected. Wedbush raised its price target on the stock 8.4%, from $475 to $515, noting that chatter around potential data center pullbacks is now "put to rest." As the line between AI and non-AI workloads continues to blur -- and AI demand proves strong even amid an uncertain macro picture -- Microsoft looks to be increasingly positioning itself as the core infrastructure provider of the AI era. In other words, hyperscaling has arrived -- and it seems here to stay.

[13]

Microsoft smashes Wall Street's earnings expectations -- and the stock soars

Microsoft (MSFT-0.92%) blew past Wall Street expectations in its fiscal third quarter, racking up $70.1 billion in revenue, up 13%, and $25.8 billion in net income, up 18%, fueled by relentless demand for cloud and AI. Azure and other cloud services surged 33% year-over-year, driving a 21% jump in the all-important Intelligent Cloud segment. EPS clocked in at $3.46, well ahead of consensus estimates around $3.22. Still, with tech stocks wobbling and investors hungry for proof that AI hype is translating into durable-margin expansion, Microsoft's forward guidance may end up mattering more than its beat. Expect commentary on the 5:30 p.m. ET earnings call to move markets. Microsoft turned in a similarly strong showing last quarter, posting $69.6 billion in revenue, up 12%, and $24.1 billion in net income, up 10%, with EPS of $3.23. Microsoft Cloud revenue jumped 21% to $40.9 billion, powered by a 31% gain in Azure and other cloud services. CEO Satya Nadella touted a $13 billion annualized run rate for the company's AI business -- up 175% year-over-year. Productivity and Business Processes rose 14%, lifted by Microsoft 365, LinkedIn, and Dynamics. More Personal Computing was flat, but search advertising, up 21%, and modest growth in Xbox and Windows OEM, helped balance things out. Even so, investors sold the news: Microsoft shares fell 6% the next day. This time, however, the momentum looks like it'll last. The stock is up 6% after hours.

[14]

Microsoft is stealing Amazon's thunder in the cloud -- and AI

And despite a few wobbles, the takeaway is clear: AI momentum and operational efficiency are driving a new wave of tech profitability, even as tariffs loom and economic uncertainty lingers. Perhaps unsurprisingly, given the widening gap between Wall Street and Main Street, the shift to AI-powered enterprise is shaping up as the gold rush of this decade. Microsoft led the charge, with the stock jumping more than 11% for the week, fueled by surging cloud and AI demand -- and management's clear, detailed take on both in the earnings call. Amazon, for its part, whipsawed before and after its earnings report, but closed the week up about 1%, buoyed by strong margin growth. Only Apple stock slipped, falling 2% as investors weighed a cautious June quarter outlook and a potential $900 million tariff hit. Together, the releases and earnings calls painted a nuanced but largely bullish picture of where Big Tech is headed -- and how it's already reshaping both the market and the macro narrative. If there was one company that seized the AI narrative last week, it was Microsoft. The company delivered a blowout quarter -- and an even more confident call -- that made clear it's not just riding the AI boom, but helping define it. Azure cloud revenue grew 33% year-over-year, reaccelerating from the previous quarter and beating both internal targets and Wall Street estimates. Almost half of that growth came from AI workloads -- a level of transparency that reinforced Microsoft's clout in the enterprise AI stack. CEO Satya Nadella and CFO Amy Hood leaned into the idea that AI and non-AI workloads are increasingly indistinguishable, especially among digital-native customers building everything on unified infrastructure. Microsoft's $80 billion forecast for fiscal 2025 capital expenditures remains intact, with plans to expand further in 2026 -- quieting any talk of a slowdown in data center investment. Wedbush called it an "Aaron Judge-like quarter" and raised its price target 8.4% to $515. Crucially, Microsoft didn't just post strong results -- it articulated a confident, forward-looking vision of how AI is already translating into revenue. In a week where every tech CEO had to tell an AI story, Microsoft made its pitch look not just polished, but inevitable. Amazon's first-quarter results were strong by the numbers: Revenue rose 9% to $155.7 billion, net income rose to $1.59 per share, and operating margins hit a record 11.8%, largely on the back of AWS, Amazon's profit engine. But with initiatives spanning AI chips, Alexa upgrades, Project Kuiper satellites, Prime Day savings on snail-mucin moisturizers, and even a new James Bond film, Amazon remains a catch-all for tech's most ambitious threads -- which may make its story harder to parse for investors. CEO Andy Jassy emphasized Amazon's ability to thrive even in a softening economy, pointing to consumer demand strength, faster Prime delivery, and $500 million in customer savings during global sales events. He struck a confident tone on AWS as well, convincinly describing it as a "multi-hundred-billion-dollar" opportunity over time. Still, the cloud business grew just 17% year-over-year -- solid, especially off a large base, but slower than Azure's 33%, and short of the expectations that Microsoft's blowout quarter had quietly raised. Analysts flagged uncertainty around near-term earnings power, as well as questions about potential tariff impacts and the timeline for Kuiper's returns. As Deutsche Bank (DB) put it, Amazon's sheer scale helps it weather global disruption -- but that same sprawl can make it tough to gauge momentum or profitability with precision. AWS remains the largest cloud provider -- a position it's held for over a decade, a default authority -- and management cited capacity constraints as a limiting factor, though relief may come in the second half of the year. Certainly, the stakes couldn't be higher. As Jassy noted, we're still in the early innings of enterprise's move to the cloud -- and that migration is accelerating, powered by AI. Enterprise tech may be the biggest market opportunity of this era, and in that context, "lumpy revenue" is both expected and fair. But with Microsoft setting the pace and reframing what success looks like, Amazon's longtime dominance feels just a bit less assured. In the meantime, Amazon is betting that its everything-now strategy will pay off later. Of course, this isn't a zero-sum game: The enterprise AI market is big enough to crown multiple winners, and both Microsoft and Amazon will undoubtedly be among the biggest. But in a moment where narrative clarity matters, Microsoft pulled ahead.

[15]

euronews

Microsoft and Meta beat estimates as AI outpaces Trump's tariff woes

Microsoft and Meta both exceeded market expectations in their March quarter earnings, lifting shares in extended trading. The results suggest robust demand for artificial intelligence is helping offset the negative impact of tariff-driven economic uncertainty. Microsoft and Meta Platforms reported March quarter earnings that beat market expectations, suggesting that strong demand for artificial intelligence (AI) is helping both companies navigate economic uncertainty driven by tariffs. The highlights from the two US tech giants include Microsoft's Azure cloud business and Meta's advertising revenue, both significantly bolstered by their AI developments. Shares of Microsoft and Meta jumped 7% and 5.4%, respectively, in after-hours trading, lifting US stock futures. Microsoft's shares are poised to recover all losses for the year, while Meta's shares remain down 3.7% year-to-date. Microsoft's Azure growth accelerates Microsoft's core cloud business -- Azure and other related services -- posted a 33% year-on-year growth in the third quarter of its 2025 fiscal year, accelerating from 31% in the previous quarter. Wall Street had anticipated annual growth of 29%. The company attributed 16% of Azure's quarterly growth to AI services, up from 13% in the preceding quarter. CEO Satya Nadella stated: "Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth," adding, "From AI infrastructure and platforms to apps, we are innovating across the stack to deliver for our customers." Microsoft kickstarted its AI leadership with a tens-of-billions-of-dollars investment in ChatGPT's owner OpenAI in late 2023. It has also integrated AI tools into its Office 365 suite and introduced chatbot-style Copilot assistants. More than 15 million people are now using its GitHub Copilot assistant, quadrupling the figure from a year ago, according to Nadella on the earnings call. "We delivered a strong quarter with Microsoft Cloud revenue of $42.4 billion, up 20% (up 22% in constant currency) year-over-year, driven by continued demand for our differentiated offerings," said Amy Hood, Microsoft's executive vice president and chief financial officer. Total revenue reached $70.1 billion (€62 billion), a 13% increase from the previous year. Diluted earnings per share (EPS) stood at $3.46 (€3.06), up 18% and comfortably exceeding the consensus forecast of $3.22 (€2.85). All major segments -- Microsoft 365 commercial and consumer products, LinkedIn, and Dynamics products and cloud services -- posted double-digit growth. "This result once again shows that Microsoft is not just riding the AI wave; it's driving it," said Josh Gilabert, market analyst at eToro Australia. However, Trump's sweeping tariffs, introduced in April, may still have a lagging effect on Microsoft's operations, though most were cut to 10% for countries other than China. Earlier in April, Microsoft scaled back some of its global data centre projects. "As AI demand continues to grow, and our data centre presence continues to expand, the changes we have made demonstrate the flexibility of our strategy," a company spokesman said at the time. Nadella previously announced that Microsoft aims to invest $80 billion (€70.7 billion) in data centre infrastructure in fiscal 2025, ending in June. Quarterly capital expenditure, including finance leases, amounted to $21.4 billion (€19 billion), a sequential decline for the first time in two years. Meta's advertising revenue posts solid growth, driven by AI Meta Platforms also posted strong results, with total revenue up 16% year-on-year to $42.31 billion (€37.41 billion), exceeding the expected $41.4 billion (€36.6 billion). Earnings per share rose 35% to $6.43 (€5.69), also well ahead of forecasts for $5.28 (€4.67). Advertising revenue -- accounting for 98% of Meta's total sales -- came in at $41.39 billion (€36.6 billion), again beating analyst expectations. "We've had a strong start to an important year -- our community continues to grow, and our business is performing very well," said CEO Mark Zuckerberg. "We're making good progress on AI glasses and Meta AI, which now has almost one billion monthly actives." Meta AI is the firm's standalone generative AI product, developed in competition with OpenAI's ChatGPT. Zuckerberg added during the earnings call: "Our business is also performing very well, and I think we're well-positioned to navigate the macroeconomic uncertainty." The company plans to ramp up spending on AI infrastructure, with capital expenditure expected to range from $64 billion (€56.6 billion) to $72 billion (€63.7 billion), up from a prior forecast of $60 billion to $65 billion. "This updated outlook reflects additional data centre investments to support our artificial intelligence efforts, as well as an increase in the expected cost of infrastructure hardware. The majority of our capital expenditures in 2025 will continue to be directed to our core business," Meta noted in its earnings report. However, the company warned that the European Commission's recent regulatory decision may hurt user experience and impact its European revenue as early as the third quarter.

[16]

SiliconANGLE

Microsoft delivers impressive earnings beat, showing strength in AI and cloud - SiliconANGLE

Microsoft delivers impressive earnings beat, showing strength in AI and cloud Microsoft Corp.'s stock gained more than 7% in late trading today after it beat expectations in its latest financial results thanks to strong growth in the cloud, and followed up with encouraging guidance for the current quarter. The company reported third-quarter earnings before certain costs such as stock compensation of $3.46 per share, easily beating Wall Street's consensus estimate of $3.22 per share. Revenue for the period rose 13% to $70.07 billion, surpassing the analyst's forecast of $68.42 billion. That resulted in net income of $25.8 billion overall, up slightly from the $21.9 billion profit recorded by the company in the same period last year. Looking to the current quarter, Microsoft said it's anticipating sales of between $73.15 billion and $74.25 billion, with the midpoint of that range coming in higher than the Street's $72.26 billion forecast. Officials are also looking for the Azure cloud infrastructure business to grow by 34% to 35% in constant currency terms, faster than the Street's target of 31.5% growth. Microsoft Chief Financial Officer Any Hood told analysts on a conference call that the company is expecting its capital expenditures to increase in the new fiscal year, but that growth will be slower than the current fiscal 2025 year. She said the company anticipates an operating margin of 43.35% in fiscal 2026, just a tad lower than the Street's target of 43.5%. The strong guidance provides considerable relief to investors, who will have been watching the company's forecast for clues on how much the company expects to suffer due to U.S. President Donald Trump's sweeping tariffs. Earlier this year, Microsoft Chief Executive Satya Nadella (pictured) said the company is looking to spend around $80 billion on building data centers for artificial intelligence workloads. Such investment will require enormous imports of equipment from overseas, and so its costs could increase significantly due to those tariffs. During the quarter just gone, the company spent $16.75 billion on capital expenditure, with the bulk of that money going towards new data center projects. That's up 53% from the year before, and ahead of the analyst forecast of $16.37 billion. Microsoft said the Azure cloud computing business saw revenue grow 33% in the quarter, with 16 points of that growth due to rising demand for its AI services. Three months earlier, Microsoft told analysts that it had been held back by disappointing execution with some clients in terms of non-AI Azure workloads. But Hood said the company saw an improvement here during the quarter. "Things were a little better, and we still have some work to do in our scale motions, and we're encouraged by our progress," she insisted. She added that Microsoft has managed to bring new infrastructure capacity online much faster than it had hoped for, helping to improve the situation. Microsoft's Intelligent Cloud business, which includes revenue from Azure, delivered $26.75 billion in sales, up 21% from a year earlier and above the consensus estimate of $26.12 billion. The company said it's benefiting from increased adoption of its AI-powered Github Copilot assistant. More than 15 million customers are now using it regularly, compared to just over three million one year ago. Valoir analyst Rebecca Wettemann said Microsoft's progress in AI is encouraging, because it initially shot itself in the foot with its original Copilot offerings, which weren't quite ready for prime time when they first launched. "Trust is critical to adoption with AI, and early copilot users learned they couldn't be trusted - adding another hurdle to adoption and monetization," Wettemann said. "With Salesforce, Oracle, ServiceNow, and others putting AI agents in production at customer sites, Microsoft will need to catch up to gain more of the pie." Even so, Wettemann believes Microsoft is in a fortunate position versus many of its rivals, as its cloud infrastructure business means that it also benefits whenever its major competitors win. "Although Microsoft obviously doesn't break out the numbers, it makes money when other vendors drive adoption of Azure cloud services through their SaaS and AI footprints that run on Azure - including ServiceNow, Genesys, Dayforce, and others," she added. The Productivity and Business unit, which encompasses the Office suite and LinkedIn, saw revenue rise 10% to $29.94 billion, just beating the analyst target of $29.57 billion. Hood noted that LinkedIn's Talent Solutions offering aimed at recruiters was "impacted by weakness in the hiring market." As for the More Personal Computing business, which includes Windows plus search advertising revenue and sales of devices and games consoles, it delivered $13.37 billion in sales, up 6% from a year earlier, beating the Street's target of $12.66 billion. Devices and Windows license sales rose 3% from a year earlier, even though inventory levels remain elevated due to the current economic uncertainty, Nadella said on the call. Microsoft is planning to end support for the older Windows 10 operating system, which was launched in October 2015, at the end of October. So enterprises are now racing to switch to Windows 11, with deployments of that software increasing by 75% in the quarter. "We continue to see increased commercial traction as we approach end of support for Windows 10," Nadella insisted. During the quarter, Microsoft provided an update on its close relationship with OpenAI, saying that it has the first right of refusal to cater to it anytime it needs more computing capacity. However, it may not always deliver that extra capacity, and if that happens, OpenAI will then be able to seek out other cloud partners. Despite the after-hours jump, Microsoft's stock is still down just over 6% in the year to date.

[17]

Fast Company

Microsoft's Q1 profits rose 18% thanks to AI and cloud computing

Microsoft's cloud computing and artificial intelligence business helped deliver $70.1 billion in sales and boosted profits by 18% for the January-March quarter, a dose of relief for investors during a turbulent time for the tech sector and U.S. economy. The company reported quarterly net income of $25.8 billion, or $3.46 per share, beating Wall Street expectations for earnings of $3.22 a share. The Redmond, Washington-based software maker posted revenue of $70.1 billion in the period, its third fiscal quarter, up 13% from the same period a year ago and also beating Wall Street expectations. Analysts polled by FactSet expected Microsoft to post revenue of $68.44 billion for the quarter. Microsoft CEO Satya Nadella credited cloud growth for its strong quarter. The company's cloud unit posted revenue of $26.8 billion, compared with expectations of $26.17 billion. "Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth," Nadella said in a statement. The company also saw a 6% increase in revenue in its personal computing unit, which includes its laptop business and Xbox services. Nadella noted on a call with investors that demand for cloud and artificial intelligence remained strong. He said Microsoft is constantly tweaking its investments based on efficiency improvements in computing systems and what kind of services customers want. "We just want to make sure we are accounting for the latest and greatest information," he said. Microsoft is among a group of the tech industry's bellwether companies that have been through a period of uncertainty and turmoil since President Donald Trump returned to the White House, with a see-sawing of stocks that has eviscerated trillions of dollars in shareholder wealth amid an onslaught of tariffs and other actions. Microsoft's stock price has dropped nearly 8% since Trump's inauguration in January, to about $395 at the close of markets Wednesday. But investors appeared pleased moments later after Microsoft released its earnings report, sending stocks up more than 6% in after-hours trading. Revenue from Microsoft's cloud computing business segment grew 21%, to $26.8 billion, also beating Wall Street projections. The company felt more tariff uncertainty in its personal computing business, which is centered around its Windows operating system and the fees it collects from computer makers that put it on the hardware they sell. Revenue from that business was $13.4 billion for the quarter, up 6% from the first three months of last year.

[18]

The Seattle Times

Microsoft puts brakes on AI spending as profit increases 18%

Since the release of the ChatGPT chatbot in 2022, Microsoft has plowed more and more money into building data centers in what one industry analyst called "the largest infrastructure build-out that humanity has ever seen." But after 10 consecutive quarters of increased spending for artificial intelligence, the company has tapped on the brakes, according to financial results released Wednesday. In the first three months of 2025, Microsoft spent $21.4 billion on capital expenses, down more than $1 billion from the previous quarter. The company indicated it was on pace to spend more than than $85 billion on capital expenses in the current fiscal year, which ends in June. But the pullback, though slight, is an indication that the tech industry's appetite for spending on AI is not limitless. Overall, Microsoft's results showed unexpected strength in its business. Sales surpassed $70 billion, up 13% from the same period a year earlier. Profit rose to $25.8 billion, up 18%. The results far surpassed Wall Street's expectations. Despite the economic uncertainty, the company predicted more strength ahead, saying revenue would surpass $73 billion in the current quarter. Satya Nadella, Microsoft's CEO, said on a call with investors that demand for cloud and artificial intelligence remained strong. He said the company was tweaking its investments based on efficiency improvements in computing systems, which countries are driving demand, and what kind of services customers want. "We just want to make sure we are accounting for the latest and greatest information," he said. Microsoft's stock price increased more than 8% in after-hours trading after the results were announced. The company had been frantically building, and in recent quarters, Microsoft had said would have seen even higher sales if it had more data centers up and running to deliver cloud computing and AI services. Amy Hood, Microsoft's finance chief, said the constraints remain and will likely bleed into the start of the next fiscal year. The company reiterated that infrastructure spending would grow in the next fiscal year, though not as sharply as it is in the current one. Sales of Microsoft's flagship cloud computing service, Azure, grew 33% in the quarter, well over Wall Street's expectations. Almost half of that growth came from artificial intelligence services. Investors have been bracing for a change in infrastructure spending since analysts at the investment bank TD Securities reported in late February that Microsoft had been pulling out of some contracts for data centers. The analysts said much of that appeared tied to projects Microsoft had intended to build for its partner, OpenAI, to develop advanced AI systems. OpenAI is now expected to work with software maker Oracle through their Stargate project. Microsoft has acknowledged slowing down projects in Ohio and Wisconsin, and said it had paused some early-stage projects as part of a "refinement" process. Analysts at the investment firm Raymond James wrote last week that they had not yet detected major reductions in spending by Microsoft's enterprise cloud customers. But they are concerned that tariffs and the uncertain economy might lead customers "to reduce spending on growth initiatives, shifting their focus to 'keeping the lights on.' " "We continue to see strong demand for our cloud and AI offerings," Hood said. Microsoft's personal computing business grew 6% to $13.4 billion. That benefited in part from computer manufacturers making more laptops with the Windows operating system, so they have inventory available amid the tariff uncertainty. Commercial sales for its online productivity tools for businesses, including Excel, Teams and Word, grew 15%. Microsoft's results would have been even stronger were it not for the weakened U.S. dollar, which reduced revenue by more than $1 billion and profit by almost $400 million.

[19]

Dataconomy

Microsoft outshines Amazon where it matters most

Microsoft and Amazon, two tech giants, reported their earnings last week, providing insight into the current state of the cloud and AI markets. Microsoft's stock surged over 11%, driven by strong cloud and AI demand, while Amazon's stock rose about 1%, buoyed by margin growth. Microsoft's Azure cloud revenue grew 33% year-over-year, with almost half of that growth attributed to AI workloads. CEO Satya Nadella and CFO Amy Hood emphasized that AI and non-AI workloads are becoming increasingly indistinguishable, particularly among digital-native customers. Microsoft's $80 billion forecast for fiscal 2025 capital expenditures remains intact, with plans to expand further in 2026. Amazon's first-quarter results were strong, with revenue rising 9% to $155.7 billion and operating margins hitting a record 11.8%, largely due to AWS, its cloud business. AWS grew 17% year-over-year, but at a slower pace than Azure's 33% growth. CEO Andy Jassy expressed confidence in AWS's potential, describing it as a "multi-hundred-billion-dollar" opportunity over time. Amazon's AI now shops the whole internet for you Analysts noted uncertainty around Amazon's near-term earnings power and potential tariff impacts. AWS remains the largest cloud provider, but its growth rate is slower than Azure's. Microsoft's clear and confident vision for AI-driven revenue growth has positioned it as a leader in the enterprise AI market. The enterprise AI market is expected to be a significant opportunity, with multiple winners likely to emerge. Both Microsoft and Amazon are well-positioned to capitalize on this trend, but Microsoft's narrative clarity has given it an edge in the current market.

[20]

U.S. News & World Report

US Tech-Related Stocks Jump After Microsoft, Meta Platforms Results

Microsoft logo is displayed on a screen during a media tour, as preparations continue ahead of the opening of the Hannover Messe, one of the world's largest industrial trade fairs with this year's partner country Canada, which, like the European Union, is similarly affected by the new U.S. tariffs, in Hanover, Germany, March 30, 2025. REUTERS/Fabian Bimmer NEW YORK (Reuters) -U.S. technology-related stocks including many involved in artificial intelligence rose sharply on Thursday following stronger-than-expected results from Microsoft and Meta Platforms, while investors awaited results from Apple and Amazon.com after the closing bell. Shares of Microsoft jumped 8.6% and Meta Platforms gained 4.8%, while AI heavyweight Nvidia was up 4.3%. Also in the AI space, Advanced Micro Devices rose 1.2%, and Broadcom and Sun Micro Computer both gained 3.5%. Shares of Amazon climbed 2.7%, while Apple was roughly flat at $212.42 as a federal judge ruled the iPhone maker had violated a U.S. court order to reform its App Store. Demand for artificial intelligence is fueling growth in cloud and digital ads, but U.S. President Donald Trump's global trade war is still expected to be a risk for many companies, especially more consumer-related names. The top U.S. technology and growth stocks, known as the "Magnificent Seven", had stumbled early in 2025 as investor concerns about the economic fallout from Trump's tariffs grew. Even though the group has rebounded since Trump paused many of his heftiest tariffs on April 9, investors are closely watching their results. Microsoft said late Wednesday that AI's contribution to Azure growth increased to 16 percentage points in its fiscal third quarter, from 13 percentage points in the previous three months. Meta Platforms' report also late Wednesday signaled that its AI-powered tools helped draw advertising dollars despite tariff-related economic uncertainty. However, shares of mobile chip designer Qualcomm were down 8.2% on Thursday. The company late Wednesday forecast third-quarter revenue just shy of Wall Street estimates. Also, earlier this week, Super Micro Computer's shares fell after it cut its revenue forecast. (Reporting by Caroline Valetkevitch; Editing by Susan Fenton)

[21]

U.S. News & World Report

Microsoft Beats Quarterly Revenue Estimates as AI Shift Bolsters Cloud Demand

(Reuters) - Microsoft topped market estimates for quarterly revenue on Wednesday, boosted by steady demand for its cloud services as businesses ramped up spending on artificial-intelligence tools. Shares of the tech giant rose more than 6% in extended trading. The results are likely to ease concerns about a potential slowdown in AI demand, after some analysts pointed to canceled data center leases at Microsoft as a sign of excess capacity. Rival Alphabet also posted strong results last week, as AI features integrated into Google Search attracted advertisers and fended off competition from startups like OpenAI, even as growth at its cloud division was hampered by supply shortages. Microsoft, which has repeatedly said it remains capacity-constrained for AI workloads, reported growth of 33% in its Azure cloud business, beating estimates of 29.7%, according to Visible Alpha. The Intelligent Cloud unit, which includes the Azure platform, reported revenue of $26.8 billion, up nearly 21% from last year and compared with expectations of $26.17 billion. Microsoft has benefited from its tie-up with OpenAI, which uses Azure to develop, train and deploy its AI models. Surging usage of ChatGPT, which uses Microsoft's infrastructure to come up with responses for user queries, has also helped Azure. The company said revenue rose 13% to $70.1 billion in its fiscal third quarter, compared with analysts' average estimate of $68.42 billion, according to data compiled by LSEG. (Reporting by Deborah Sophia in Bengaluru; Editing by Matthew Lewis)

[22]

Microsoft Stock Pops as Cloud and AI Strength Drives Earnings Growth

Microsoft (MSFT) reported fiscal third-quarter revenue and profits that surpassed analysts' expectations, sending shares higher in extended trading Wednesday. The tech titan's revenue grew 13% year-over-year to $70.07 billion, above the analyst consensus from Visible Alpha. Net income of $25.82 billion, or $3.46 per share, rose from $21.94 billion, or $2.94 per share, a year earlier, topping Wall Street's estimates. The gains came as revenue from Microsoft's Intelligent Cloud segment, which includes its Azure cloud computing platform, improved 21% to $26.75 billion, above expectations. "Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth," CEO Satya Nadella said. "From AI [infrastructure] and platforms to apps, we are innovating across the stack to deliver for our customers." Earlier this year, Microsoft said it plans to spend $80 billion on infrastructure in fiscal 2025. Microsoft shares rose over 6% in after-hours trading. The stock was down 6% for the year so far through Wednesday's close.

[23]

Nvidia Stock Jumps as Microsoft, Meta Commit to Continued Heavy AI Spending

During Microsoft's earnings call Wednesday, CFO Amy Hood reiterated the company's plan to spend $80 billion on AI infrastructure in fiscal 2025. Meta, meanwhile, said it plans to boost its capital expenditures this year to $64 billion to $72 billion to grow its AI capacity. Mark Zuckerberg, the social media giant's CEO, called the opportunities in deploying the technology "staggering" during Meta's earnings call. Nvidia shares, which are jumping about 4.5% less than an hour before the opening bell, have been struggling this year, falling 19% entering Thursday partly due to investor concerns that Big Tech is slowing or pausing some AI data center buildouts amid the uncertain economic outlook. The company dominates the market for chips needed to build AI systems. Shares in the chip designer have also taken a hit from the rising economic uncertainty triggered by the trade war as well as growing tensions between Beijing and Washington. It recently warned investors that it expects to take a $5.5 billion first-quarter charge after the U.S. government limited exports of its AI chips to China. Nvidia is expected to report quarterly earnings later this month.

[24]

Microsoft Stock Rockets Higher as Analysts Raise Price Targets on AI-Fueled Growth

Microsoft reiterated its plan to spend $80 billion on infrastructure in fiscal 2025. Microsoft (MSFT) shares surged Thursday after the company posted what Morgan Stanley called "one of their strongest quarters in recent memory," on growth fueled by demand for cloud computing and AI. Microsoft shares were up nearly 9% in recent trading to about $430, pushing them into positive territory for 2025. Morgan Stanley raised its price target to $482 from $472 following the results, which beat Wall Street's revenue expectations across all segments. "We remain strong buyers of this GenAI winner," the analysts said. "Bottom-line, while the macro presents uncertainty, Microsoft appears poised to yield on GenAI investments which should support share gains and more durable growth ahead." Bank of America maintained a $515 target, and noted earlier-than-expected returns on Microsoft's infrastructure investments. During Microsoft's earnings call Wednesday, CFO Amy Hood reiterated the company's plan to spend $80 billion on infrastructure in fiscal 2025. Hood said demand for AI has continued to grow, to the point Microsoft expects "to have some AI capacity constraints beyond June." Meanwhile, Jefferies boosted its target to a more bullish $550 and Wedbush moved to $515, both from $475 previously. "We are laser focused on the AI piece of this MSFT story," Wedbush said. "All metrics were ahead of expectations which give us added confidence in the AI Revolution bull thesis."

[25]

Is the AI Trade Back on After Meta and Microsoft Earnings?

Microsoft and Meta both beat expectations with their quarterly results on Wednesday. Microsoft reported a 21% increase in cloud revenue, while Meta said its AI is approaching 1 billion monthly active users. The results boosted beaten-down AI and Big Tech stocks. Nvidia (NVDA) stock, which entered Thursday's session down 19% since the start of the year, was up about 4% in recent trading. Nuclear power providers Vistra (VST) and Constellation Energy (CEG), whose stocks soared last year on booming demand for electricity to power AI data centers, were up more than 6% and 8%, respectively, lifting both stocks into positive territory for the year. Networking tech company Arista Networks (ANET), down about 30% year-to-date as of Wednesday, jumped more than 7%. AI stocks were hit hard by this year's market mayhem. AI stocks sold off in late January after advances by Chinese startup DeepSeek called into question the economic assumptions underpinning the AI trade. That panic was followed by President Donald Trump's global trade war, which sent investors racing into safe havens amid mounting concerns about a worldwide economic slowdown. The economic uncertainty appeared to be taking a toll on AI investment. Microsoft's head of cloud operations last month said the company was pausing work on some AI data centers in their early phases, and Amazon was reportedly mulling slowing its data-center expansion. Microsoft and Meta's results put those concerns to bed -- at least for now. Microsoft reiterated its plan to spend $80 billion this year, and Meta said it will boost its capital expenditures to between $64 billion and $72 billion to boost AI capacity. Google parent Alphabet (GOOG) also stood by its big AI spending plans when it reported solid earnings last week. Executives on Wednesday justified their big spending plans by pointing to continued strong demand for AI services. Microsoft CFO Amy Hood told analysts demand was still higher than the company could satisfy, and that it would likely "have some AI capacity constraints beyond June." The results also gave investors some evidence that AI investments are paying off. Meta CEO Mark Zuckerberg told analysts Wednesday that AI-driven content recommendations had increased time spent on its platforms by between 6% and 35% in the last six months. "As we look around and ask the question, 'What's the return on investment on AI?' Meta is actually showing tangible examples of that," said Gene Munster, managing partner at Deepwater Asset Management, on Wednesday. "All the potential that drove AI stocks higher in 2024 remains intact," Munster and his colleague Brian Baker wrote at the height of last month's tariff-induced chaos. "At Deepwater, we continue to believe there are still 2-3 years left in this bull market."

[26]

Why Microsoft Stock Had One of Its Best Post-Earnings Days in a Decade

CFO Amy Hood noted that AI demand continued to outstrip supply, comments that helped temper Wall Street's fear that macroeconomic uncertainty would slow AI growth. Microsoft (MSFT) stock soared on Thursday after the tech giant's quarterly results handily beat Wall Street estimates. Shares closed up 7.6% at $425.20, a jump that marks the stock's second-best post-earnings performance in nearly 10 years. The last time Microsoft stock popped significantly more than that on earnings was in October 2015 when the company reported revenue from its nascent Azure cloud computing business had more than doubled from the prior year, and shares surged 10%. Wall Street on Thursday was cheering strong results in each of Microsoft's major business lines. Sales at the company's cloud computing unit rose 22% in constant currency (cc) terms to nearly $27 billion. Revenue at its productivity and business software unit also grew double digits, and even devices revenue -- a soft spot for most tech companies of late -- increased 3%.(cc) But it was the Azure business, Microsoft's cloud computing and AI platform, that really excited Wall Street. Azure growth accelerated to 35% (cc) in the quarter, well ahead of analysts' forecasts. CFO Amy Hood on Wednesday's earnings call noted that, despite recent economic uncertainty, AI demand continued to grow faster than Microsoft's supply. Hood's warning helped to assuage some fear on Wall Street that macroeconomic headwinds would stunt AI growth. The AI stocks that tumbled from their record highs earlier this year -- like chipmaker Nvidia (NVDA) and nuclear power providers Constellation Energy (CEG) and Vistra (VST) -- led Thursday's rally. Analysts at BMO raised their price target to $485 on Thursday morning, citing "improved Azure growth." Bank of America Securities analysts noted Microsoft's partnership with OpenAI was a major driver behind the Azure beat, "which should allay fears that the partnership has frayed a bit." The firm raised its price target on the stock by 7% to $515, and reiterated its "top pick" call. "We remain confident that MSFT's revenue growth opportunities over the medium-term and beyond are greater than many realize, and we continue to be very bullish on its tangible GenAI adoption and monetization levers," Mizuho Americas analysts wrote on Thursday as they raised their price target to $500.

[27]

Meta, Microsoft reports lift AI-related stocks

Following strong earnings reports from Meta and Microsoft, shares in AI and cloud computing companies surged on Wednesday. Microsoft's shares jumped over 6% due to strong Azure cloud growth, while Meta's rose more than 4% as AI-powered tools boosted advertising revenue. Nvidia increased 2.8%, Advanced Micro Devices increased 2%, and Amazon increased 3%.Shares in artificial intelligence and cloud-computing-related companies were rising sharply in late trade on Wednesday after Meta Platforms and Microsoft results beat Wall Street expectations. The reports appeared to boost demand for shares in AI chip leader Nvidia Corp, which rose 2.8% in late trading, and chip rival Advanced Micro Devices, which rose 2%. Shares in Amazon.com, which competes with Microsoft in cloud-computing and is due to report results on May 1, were up 3% with strong after-the-bell volume. Google parent Alphabet shares were up more than 1% after the reports. Shares in Microsoft soared more than 6% in late trading after it topped quarterly revenue expectations on strong Azure cloud-computing growth, reassuring investors its hefty AI investments were paying off. Shares in social media company Meta Platforms were up more than 4%, after it also beat Wall Street estimates for first-quarter revenue, signalling that its AI-powered tools helped draw advertising dollars despite tariff-related economic uncertainty. Shares in smaller AI-related tech company Super Micro Computer briefly rose sharply after the reports but then pared gains and were last up 0.7%. In the regular session on Wednesday Super Micro Computer shares had tumbled 11% after it slashed its revenue forecast. Shares in C3.AI Inc were up 1% but volume was lighter.

[28]

Microsoft reports strong results driven by cloud and AI

Technology giant Microsoft posted robust quarterly results on Wednesday, with revenue rising 13 percent to $70.1 billion, powered by a strong performance in its cloud computing and artificial intelligence businesses. The company's Intelligent Cloud segment, a key part of Microsoft's business, showed particularly strong growth with revenue of $26.8 billion, up 21 percent. Technology giant Microsoft posted robust quarterly results on Wednesday, with revenue rising 13 percent to $70.1 billion, powered by a strong performance in its cloud computing and artificial intelligence businesses. The results, which solidly beat analyst expectations, drove Microsoft's share price more than eight percent higher in after-hours trading. The Redmond, Washington-based company also allayed worries that it would suffer due to the high tariff policies of President Donald Trump's administration, offering a good outlook for the ongoing quarter. Microsoft has remained more discreet in its support for Trump than its rivals, many of which contributed money to the president's inauguration fund and announced major investments in the United States. The company, which celebrates its 50th anniversary this year, saw net profits climb 18 percent to $25.8 billion, compared to the same period last year. Crucially, Microsoft Cloud revenue reached $42.4 billion, growing 20 percent year-over-year, which Chief Financial Officer Amy Hood attributed to "continued demand for our differentiated offerings." Microsoft was one of the first tech giants to double down on artificial intelligence when the launch of ChatGPT in 2022 rocked the tech industry. Like its rivals, it has spent massively on building the infrastructure necessary to power the AI revolution, with analysts keeping a close eye on the return on investment. The company in January said it was on track to pump about $80 billion into capital and infrastructure this fiscal year. But CEO Satya Nadella said that even if "I feel very, very good about the pace" of investments, the company was always tweaking its spending. He added that finding enough power sources for its AI data center needs was a priority. Microsoft this quarter said its relationship with ChatGPT creator OpenAI was evolving and that it would no longer be the exclusive provider of the key startup's colossal computing needs. It has been a major backer of OpenAI, mainly by providing the heavy computing capacity required to build AI models. The company's Intelligent Cloud segment, a key part of Microsoft's business, showed particularly strong growth with revenue of $26.8 billion, up 21 percent. Its Azure and other cloud services revenue surged 33 percent, reflecting the increasing adoption of Microsoft's cloud platforms. The Productivity and Business Processes division, which includes Office 365 and LinkedIn, generated $29.9 billion in revenue, a 10 percent increase. The company said it returned $9.7 billion to shareholders through dividends and share repurchases during the quarter. "This was a strong, steady quarter from a company that's matured into its AI moment," said Jeremy Goldman of Emarketer. Despite a few hiccups, "Microsoft's ability to turn AI enthusiasm into real revenue... sets it apart in a field crowded with promise but short on payoff."

[29]

Microsoft puts brakes on AI spending as profit increases 18%

Microsoft's Q1 2025 results showed strong growth with $70.1 billion revenue and $25.8 billion profit, driven by 33% Azure growth and AI services. Capital spending fell slightly to $21.4 billion but remains high, with $85 billion forecast for the year. CEO Nadella cited efficiency and strong cloud demand.Since the release of the ChatGPT chatbot in 2022, Microsoft has ploughed more and more money into building data centres in what one industry analyst called "the largest infrastructure build-out that humanity has ever seen." But after 10 consecutive quarters of increased spending for artificial intelligence, the company has tapped on the brakes, according to financial results released Wednesday. In the first three months of 2025, Microsoft spent $21.4 billion on capital expenses, down more than $1 billion from the previous quarter. The company indicated it was on pace to spend more than than $85 billion on capital expenses in the current fiscal year, which ends in June. But the pullback, though slight, is an indication that the tech industry's appetite for spending on AI is not limitless. Overall, Microsoft's results showed unexpected strength in its business. Sales surpassed $70 billion, up 13% from the same period a year earlier. Profit rose to $25.8 billion, up 18%. The results far surpassed Wall Street's expectations. Despite the economic uncertainty, the company predicted more strength ahead, saying revenue would surpass $73 billion in the current quarter. Satya Nadella, Microsoft's CEO, said on a call with investors that demand for cloud and artificial intelligence remained strong. He said the company was tweaking its investments based on efficiency improvements in computing systems, which countries are driving demand, and what kind of services customers want. "We just want to make sure we are accounting for the latest and greatest information," he said. Microsoft's stock price increased more than 8% in after-hours trading after the results were announced. The company had been frantically building, and in recent quarters, Microsoft had said would have seen even higher sales if it had more data centres up and running to deliver cloud computing and AI services. Amy Hood, Microsoft's finance chief, said the constraints remain and will likely bleed into the start of the next fiscal year. The company reiterated that infrastructure spending would grow in the next fiscal year, though not as sharply as it is in the current one. Sales of Microsoft's flagship cloud computing service, Azure, grew 33% in the quarter, well over Wall Street's expectations. Almost half of that growth came from artificial intelligence services. Investors have been bracing for a change in infrastructure spending since analysts at the investment bank TD Securities reported in late February that Microsoft had been pulling out of some contracts for data centres. The analysts said much of that appeared tied to projects Microsoft had intended to build for its partner, OpenAI, to develop advanced AI systems. OpenAI is now expected to work with software maker Oracle through their Stargate project. Microsoft has acknowledged slowing down projects in Ohio and Wisconsin, and said it had paused some early-stage projects as part of a "refinement" process. Analysts at the investment firm Raymond James wrote last week that they had not yet detected major reductions in spending by Microsoft's enterprise cloud customers. But they are concerned that tariffs and the uncertain economy might lead customers "to reduce spending on growth initiatives, shifting their focus to 'keeping the lights on.'" "We continue to see strong demand for our cloud and AI offerings," Hood said. Microsoft's personal computing business grew 6% to $13.4 billion. That benefited in part from computer manufacturers making more laptops with the Windows operating system, so they have inventory available amid the tariff uncertainty. Commercial sales for its online productivity tools for businesses, including Excel, Teams and Word, grew 15%. Microsoft's results would have been even stronger were it not for the weakened U.S. dollar, which reduced revenue by more than $1 billion and profit by almost $400 million.

[30]

Big Tech's fortunes diverge as AI powers cloud, tariffs hit consumer electronics

AI came to the rescue of earnings at Microsoft and Google-parent Alphabet in their March quarter, offering investors hope that their billion-dollar bets on the technology would help them ride out the fallout from sweeping US tariffs. The Trump administration has so far spared electronics from tariffs, but Washington has signaled that some levies could be imposed in the coming weeks.The fortunes of Big Tech are diverging in a rapidly changing business landscape, as demand for artificial intelligence fuels growth in cloud and digital ads while consumer electronics take a battering from President Donald Trump's global trade war. AI came to the rescue of earnings at Microsoft and Google-parent Alphabet in their March quarter, offering investors hope that their billion-dollar bets on the technology would help them ride out the fallout from sweeping U.S. tariffs.Their upbeat commentary stood in stark contrast to gloomy predictions from companies more exposed to tightening consumer budgets: chipmakers Qualcomm, Samsung Electronics, and Intel warned that economic uncertainty caused by Trump's attempts to reorder global trade was hurting their businesses. The split highlights how enterprise-focused firms are holding steady despite economic jitters, while a pullback in consumer spending is weighing on demand for smartphones, personal computers, and the chips that power them. This could spell trouble for Apple, which makes 90% of its products in China and generates about half its revenue from iPhone sales. Amazon.com's e-commerce business could be hit as well, though its cloud division - which accounts for most of its profit - is expected to hold up like Microsoft and Google's. Amazon and Apple are scheduled to report results on Thursday after market close. "There hasn't been an impact on their (Google and Microsoft's) businesses yet because they're not in the consumer business. As we get into Apple and Amazon, that may be a little different," said D.A. Davidson analyst Gil Luria. "Apple is going to be impacted, there's very little that they can do to avoid some impact due to tariffs. With Amazon, the disruption is a little more pronounced on the retail side because many of their merchants are in China." The Trump administration has so far spared electronics from tariffs, but Washington has signaled that some levies could be imposed in the coming weeks. Apple will try to mitigate tariffs by shifting production of U.S.-bound iPhones to India, Reuters has reported, but it is likely to keep price increases to a minimum to avoid losing market share and would have to stomach any elevated costs. Some third-party merchants on Amazon, who sell China-made goods during the company's buzzy July shopping event, are planning to sit it out this year to protect profit margins, Reuters has reported. AI spending pays off Samsung, which makes smartphones as well as chips that go in them, struck a more cautious tone, saying "demand uncertainties are growing in the second half as a result of recent changes in tariff policies in major countries." Mobile chip designer Qualcomm on Wednesday forecast third-quarter revenue that would miss estimates, reflecting the impact from tariffs. Apple is known to be Qualcomm's biggest customer. Microsoft on Wednesday reported a stronger-than-expected 33% jump in revenue in its Azure cloud business and forecast an acceleration in growth. Alphabet last week posted an 8.5% rise in its mainstay ad sales, as the integration of AI into Google search increased its appeal to advertisers. Facebook-parent Meta on Wednesday also topped revenue expectations on strong ad sales. But Meta's smaller rival Snap said on Tuesday it would not issue a quarterly forecast due to economic uncertainty, as advertisers favor bigger platforms in tough times. Microsoft stock surged 7% after hours on Wednesday, while those of AI chip suppliers Nvidia, Advanced Micro Devices, and Broadcom each gained more than 3%. "Through April, demand signals across our commercial businesses as well as in LinkedIn, gaming and search have remained consistent," Microsoft CFO Amy Hood told analysts. Some analysts said the strong results from Microsoft suggested that fears the tech giants may have added too much data center capacity to support AI demand may have been overblown. The Windows maker, whose shares have declined 6% this year, had been under pressure after analysts' reports said it canceled some data center leases in a potential sign of oversupply. But on Wednesday, the company said that AI's contribution to Azure growth increased to 16 percentage points in the March quarter, from 13 percentage points in the previous three months. "The big improvement in AI contribution shows the high potential for AI once capacity becomes available," Barclays analysts said in a note. Microsoft, which plans to spend $80 billion on AI infrastructure this fiscal year, warned it remains supply-constrained, mirroring comments from Alphabet. "We had hoped to be in balance (cloud capacity) by the end of the fourth quarter. We did see some increased demand, as you saw through the quarter, so we are going to be a little short, a little tight as we exit the year, but are encouraged by that," Microsoft's Hood said.

[31]

Microsoft forecasts strong growth for Azure cloud business, shares surge 7%

Microsoft forecast on Wednesday stronger-than-expected quarterly growth for its cloud-computing business Azure after blowout results in the latest quarter, calming investor worries in an uncertain economy and lifting its shares 7% after hours. Microsoft's results, which follow similar outcomes from Google last week, could ease concerns about a potential slowdown in AI demand, after some analysts pointed to cancelled data-centre leases at Microsoft as a sign of excess capacity. Investors had also been worried about the fallout from sweeping US tariffs that are prompting businesses to rein in spending, but robust advertising sales at Meta Platforms suggested that is so far not happening. The rise in Microsoft's shares set it on course to add more than $200 billion to its value. Microsoft said revenue at its Azure cloud division rose 33% in the third quarter ended March 31, exceeding estimates of 29.7%, according to Visible Alpha. AI contributed 16 percentage points to the growth, up from 13 points in the previous quarter. The company also forecast cloud-computing revenue growth of 34% to 35% on a constant currency basis for the fiscal fourth quarter to between $28.75 billion and $29.05 billion, well above analyst estimates, according to data from Visible Alpha. Commercial bookings growth - which reflects new infrastructure and software contracts signed by business customers - rose 18% in the fiscal third quarter, driven in part by a new Azure contract with ChatGPT creator OpenAI. Microsoft declined to comment on the size of the deal or what role it played in overall Azure sales growth. However, Amy Hood, Microsoft's chief financial officer, told investors on a conference call that the AI contribution to the cloud computing business was in line with the company's expectations, while "the real outperformance in Azure this quarter was in our non-AI business." "So the only real upside we saw on the AI side of the business was that we were able to deliver supply early to a number of customers," Hood said. The company's Azure results came after a number of Wall Street analysts had lowered expectations as research reports said Microsoft had ended some data centre lease obligations. CEO Satya Nadella said on a conference call that Microsoft has a long history of constantly adjusting its data centre plans, but only in recent quarters had analysts started closely scrutinizing those moves. "The numbers were sceptical going in, giving them the room to beat pretty heavy. The beat wouldn't have been this big if we didn't have all these problems," said Dan Morgan, senior portfolio manager at Synovus Trust, referring to tariff uncertainty. Spending rises for shorter-lived assests Redmond, Washington-based Microsoft reported a profit of $3.46 per share in the quarter, topping expectations of $3.22 per share. Revenue rose 13% to $70.1 billion, with the Intelligent Cloud unit, which houses Azure, contributing $26.8 billion. In the third quarter, Microsoft's capital expenditures jumped 53% to $21.4 billion, however the proportion of longer-lived asset expenditures fell to about half of the total. Hood told investors that in the company's fiscal 2026, which will begin in July, capital expenditures will continue to grow, but at lower growth rates than for the current year and with more of an emphasis on shorter-lived assets. That reflected a shift in Microsoft's spending on assets such as data centre buildings toward assets such as chips, said Jonathan Neilson, Microsoft's vice president of investor relations. "You plug in CPUs and GPUs, and then you can start recognizing revenue," Neilson said, referring to categories of chips made by Intel, Advanced Micro Devices and Nvidia, among others. Microsoft, which has repeatedly said it is capacity constrained on AI, has been pouring billions into building its AI infrastructure and expanding its data-centre footprint. A pullback in Big Tech's AI spending would have big implications for suppliers such as chip giant Nvidia, as well as the US economy. J.P. Morgan analysts estimated in January that data-centre spending could contribute between 10 and 20 basis points to US economic growth in 2025-2026.

[32]

Nvidia Stock Surges After Hours: What's Going On? - NVIDIA (NASDAQ:NVDA)

NVIDIA Corp NVDA shares are rising in extended trading Wednesday following strong earnings from Microsoft Corp MSFT and Meta Platforms Inc META. What Happened: Microsoft beat analyst estimates for the third quarter on the top and bottom lines, driven by strong Azure and cloud services growth. Total Microsoft cloud revenue came in at $42.4 billion, up 20% year-over-year. Azure and other cloud services revenue increased 33% year-over-year, suggesting that the company's heavy AI investments are paying off. "Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth," said Satya Nadella, chairman and CEO of Microsoft. Meta also reported strong quarterly results after the bell and raised its full-year capital expenditures outlook to a range of $64 billion to $72 billion, up from prior guidance of $60 to $65 billion. The company attributed the higher forecast to increased AI investments, reassuring investors that the AI trade is still alive. Nvidia is leading a pack of AI-related names higher after the bell as investor sentiment surrounding AI names appears to have gotten a boost from the mega-cap reports. Both Microsoft and Meta are significant players in AI and cloud computing, which appears to have reinforced confidence in the sector. Nvidia scheduled its first-quarter financial results after the close on Wednesday. The company is now set to report earnings after the market close on May 28. Analysts are anticipating earnings of 88 cents per share on revenue of $43.07 billion, according to estimates from Benzinga Pro. NVDA Price Action: Nvidia shares were up 4.52% after-hours, trading at $113.75 at the time of publication on Wednesday, per Benzinga Pro data. Read Next: Amazon Stock Is Rising After The Bell: What's Driving The Action? Photo: Hepha1st0s/Shutterstock. NVDANVIDIA Corp$113.414.03%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum59.23Growth94.79Quality97.52Value7.31Price TrendShortMediumLongOverviewMETAMeta Platforms Inc$575.113.73%MSFTMicrosoft Corp$427.868.58%Market News and Data brought to you by Benzinga APIs

[33]

Microsoft's Blockbuster Quarter Cements Goldman's Bullish AI, Cloud Thesis - Microsoft (NASDAQ:MSFT)

Microsoft Corp. MSFT delivered a blockbuster quarter that beat expectations across the board, with cloud and AI momentum now so strong that Goldman Sachs sees the stock marching near all-time highs at $480 per share. In a note shared Thursday, Goldman Sachs analyst Kash Rangan said Microsoft's fiscal third-quarter results reinforced confidence in the company's long-term AI leadership, as Azure growth reaccelerated and new data pointed to durable enterprise demand for cloud infrastructure and AI tools. What Drove The Beat? For the quarter ending March 31, Microsoft reported earnings per share of $3.46, exceeding estimates of $3.21, while revenue climbed to $70.07 billion, ahead of the $68.48 billion consensus. Azure and other cloud services revenue rose 35% year-over-year in constant currency, accelerating from 31% in the prior quarter and topping Goldman's forecast of 32%. Crucially, artificial intelligence continues to drive Azure's growth. AI-related services contributed 16 percentage points of that 35% increase, up from 13 points last quarter. Non-AI workloads also posted their first acceleration since early 2024, growing 19%, a sign that demand is broadening beyond early AI adopters. "We reiterate our Buy rating while raising our PT to $480 (vs. $450 prior) following F3Q25 outperformance across all key metrics," Rangan said. He added that Microsoft is increasingly well-positioned to capture a share of the AI market across both infrastructure and application layers. CapEx: Still High, But Under Control Microsoft's capital expenditures came in at $21.4 billion, marking the first sequential decline in CapEx since the first fiscal quarter of 2023, which helped ease concerns that the company was overspending to maintain its AI advantage. Despite the pullback, Goldman says Microsoft's capital expenditures (CapEx) are still likely to grow faster than cloud revenue in the short term, reflecting longer-term investments required to meet rising demand. Rangan held his fiscal year 2026 CapEx growth forecast at 21% year-over-year and signaled that capital intensity may begin moderating after years of heavy investment. This, Rangan said, should be a "relief for the tech food chain," as it suggests peak CapEx is not yet behind the company but may soon be reached. Copilot Gains Traction Another standout: Microsoft's generative AI product Copilot continues to gain adoption, with user numbers up 3x year-over-year and over 230,000 organizations engaging with Copilot Studio. This supports Goldman's thesis that Copilot could evolve into the defining enterprise application of the AI era. Record customer seat purchases further strengthen the case that Copilot is not just a flashy experiment but a sticky, revenue-generating platform that could replicate the kind of success seen in Microsoft 365. Q4 Guidance And AI Outlook Looking ahead, Microsoft guided fourth-quarter cloud margins to about 67%, with intelligent cloud revenue expected between $28.75 billion and $29.05 billion. Productivity segment sales are forecast at $32.05 billion to $32.35 billion, while more personal computing should bring in $12.35 billion to $12.85 billion. Goldman says that despite macroeconomic uncertainty and potential tariff risks, the company is set up to post free cash flow growth of 3% and earnings-per-share growth of 17% in fiscal year 2026, with Azure maintaining a 30% growth rate. The firm expects earnings to reaccelerate into the high double digits as Microsoft exits its capital-intensive phase and enters the high-margin inference stage of AI deployment. "We continue to believe that as Gen-AI moves from the infrastructure layer to the platform/application layers, Microsoft is well positioned to capitalize on this shift," Rangan said. Shares of Microsoft were up as much as 8.4% in premarket trading Thursday. Read now: 'Sell In May And Go Away' Looks Outdated As May-July Data Signal Bullish S&P 500 Seasonality Photo: Shutterstock MSFTMicrosoft Corp$429.778.73%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum44.62Growth64.47Quality37.04Value14.37Price TrendShortMediumLongOverviewGot Questions? AskWhich cloud computing stocks could benefit from Azure's growth?How might AI technology firms capitalize on Microsoft's momentum?What impact will Microsoft's Copilot have on enterprise software?Which competitors are challenged by Microsoft's AI leadership?How will capital expenditures affect tech sector investments?Which emerging markets may benefit from AI infrastructure demand?What other AI applications could see growth alongside Microsoft?How could investors leverage Microsoft's earnings guidance?Which sector ETFs might gain from AI advancements?What role will enterprise demand play in tech stock performance?Powered ByMarket News and Data brought to you by Benzinga APIs

[34]

Microsoft Shares Are Up Today: What's Going On? - Microsoft (NASDAQ:MSFT)

Microsoft Inc. MSFT shares traded higher on Thursday after the company beat third-quarter earnings expectations and gave strong revenue guidance. What To Know: The company reported $70.07 billion in revenue, up 13% and $3.46 earnings per share, both above Wall Street estimates. The move also comes as Microsoft prepares to host Elon Musk's Grok AI model on its Azure AI Foundry platform. This would allow developers to use Grok through Microsoft's cloud. If finalized, the deal could worsen tensions with OpenAI, Microsoft's main AI partner, especially as the two have clashed publicly and privately in recent months. Microsoft has been aggressively expanding Azure's AI services, hosting models from other companies such as DeepSeek and Anthropic. CEO Satya Nadella is pushing to turn Azure into the infrastructure backbone for third-party AI models. Separately, Microsoft is rolling out new Windows features like Recall and an AI-powered search. It is also raising Xbox hardware prices. Cloud revenue rose 20% year-over-year to $42.4 billion. Up to 30% of some Microsoft code is now AI-written, according to Nadella. Tech and chip stocks like Nvidia and Broadcom also rallied in response, as Microsoft and Meta's strong results boosted confidence in the AI and cloud market. MSFT Price Action: Microsoft shares closed Thursday up 7.63% at $425.40, according to Benzinga Pro. Read next: Amazon.com Q1 Earnings Preview: All Eyes On E-Commerce Trends, AI As Tariff Anxiety Grows Image Via Shutterstock. MSFTMicrosoft Corp$426.037.78%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum44.62Growth64.47Quality37.04Value14.37Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

[35]

Microsoft Stock Rallies On Q3 Strength Of Azure: Analyst Says Company Is 'Sole AI Leader In Both Apps And Infrastructure' - Microsoft (NASDAQ:MSFT)

Feel unsure about the market's next move? Copy trade alerts from Matt Maley -- a Wall Street veteran who consistently finds profits in volatile markets. Claim your 7-day free trial now. Microsoft Corporation MSFT analysts highlight a strong showing by Azure as the key factor that powered the tech giant's better-than-expected third-quarter performance. Microsoft Analysts: TD Cowen analyst Derrick Wood maintained a Buy rating on Microsoft and raised the price target from $475 to $490. KeyBanc analyst Jackson Ader maintained a Sector Weight rating with no price target. JPMorgan analyst Mark Murphy maintained an Overweight rating and raised the price target from $465 to $475. Piper Sandler analyst Brent Bracelin maintained an Overweight rating and raised the price target from $435 to $475. Bank of America analyst Brad Sills reiterated a Buy rating and raised the price target from $480 to $515. Scotiabank analyst Patrick Colville reiterated a Sector Outperform rating and raised the price target from $470 to $500. Read Also: Microsoft Plans To Leverage A 'Malleable Resource' To Thrive In A Recession, Satya Nadella Explains TD Cowen on MSFT: A rebound in non-AI growth and strong AI demand were highlights in the third quarter for Wood according to a new investor note. The analyst said Azure, cloud and AI saw strong demand in the quarter. For Azure, growth of 35% year-over-year was well above guidance, Wood said. "MSFT attributed upside mostly to better-than-expected non-AI workload growth, driven by enterprise strength and accelerating demand for cloud migrations," Wood said. Wood said the strength of Azure reverses several bumpy quarters and could shift the narrative on the stock. "MSFT appears well positioned in key secular growth markets, particularly Public Cloud with its Azure platform, which we expect to be the company's main growth driver." KeyBanc on MSFT: Microsoft reported its "cleanest quarter in a while," Ader said in a new investor note. The analyst said the right items delivered the upside. "Azure growth was the standout at 35% growth in constant currency on the back of cleaning up some execution that hurt last quarter and some capacity being unlocked earlier than expected," Ader said. Ader said his recent downgrade of the stock "looks pretty foolish right now." "The quarter does highlight a principal risk in not being overweight MSFT right now, which is that we have no visibility into capacity unlocks." The analyst said Microsoft's return on investment math for AI is still difficult to make sense of and there could be better stocks to play "offense" with. JPMorgan on MSFT: Investors may have been too pessimistic ahead of Microsoft's earnings, Murphy said in a new investor note. "Azure performance a ray of light," Murphy said. The analyst said the hard data looks more resilient than the soft data and Microsoft's Azure and AI strength showed up in the quarter. "The apparent lack of any tangible macro stress or strain, including commentary that demand signals across the commercial business were consistent in April and are expected to remain so moving forward." Murphy said Microsoft's AI Services are showing upside faster than expected. "Microsoft has pulled ahead of the pack with a state-of-the-art cloud platform." Piper Sandler on MSFT: Third-quarter results were "better-than-feared," Bracelin said in a new investor note. "Azure growth surprisingly accelerated to 35% on a combination of non-AI outperformance and continued AI momentum," Bracelin said. The analyst said Microsoft's strong operating cash flow provides flexibility for increased capex, dividends, M&A or stock buybacks in the future. "The world's largest cloud franchise with a first-mover advantage in Gen AI," Bracelin said of Microsoft. Bank of America on MSFT: Azure and AI were the highlights for Sills. "View Microsoft as the sole AI leader in both apps and infrastructure," Sills said. The analyst said Microsoft has balanced cloud and AI growth that helped boost Azure in the quarter. "Q3 results suggest that ROI on capex is coming into view sooner than expected." Scotiabank on MSFT: Microsoft is bringing "a new golden age driven by Azure," Colville said in a new investor note. The analyst said the third quarter was a standout quarter with standout guidance. "Azure F3Q growth was a blowout, driven by unleashed AI spend and traditional workloads up-ticking Q/Q," Colville said. The analyst said the quarterly results could shutdown the "AI slowdown bear narrative." "With MSFT trading not far off 5-year valuation lows, we think now is the time to step back in." The analyst said Microsoft has a strong future as a "leading horseman of the AI revolution." MSFT Price Action: Microsoft stock is up 8.5% to $428.93 on Thursday versus a 52-week trading range of $344.79 to $468.35. Microsoft stock is up 2.4% year-to-date in 2025. Read Next: Microsoft's Blockbuster Quarter Cements Goldman's Bullish AI, Cloud Thesis Photo: Shutterstock MSFTMicrosoft Corp$427.448.14%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum44.62Growth64.47Quality37.04Value14.37Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

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Seeking Alpha

Bright Spot Amid Broader Uncertainty

Listen on the go! A daily podcast of Wall Street Breakfast will be available by 8:00 a.m. on Seeking Alpha, iTunes, Spotify. Investors are cheering the blowout earnings from Microsoft (MSFT) and Meta (META), with their guidance signaling resilience amid broader economic fears. The tech heavyweights also remain committed to investing heavily in artificial intelligence, even as trade uncertainty has pushed other firms to rein in spending. Azure strength: Microsoft shares soared 8% in after hours on Wednesday as its third-quarter results beat estimates, driven by its cloud computing unit Azure and AI business. "Cloud and AI are the essential inputs for every business to expand output, reduce costs and accelerate growth," CEO Satya Nadella said, with continued strength expected into FY 2026. Microsoft continues to expect its capital spending to grow in FY 2026, although at a slower pace than FY 2025. SA analyst Investor's Compass said the strong results reinforce Microsoft's long-term thesis. More AI spending: Meta's stock jumped 5% in post-market trade on Wednesday following better-than-expected first-quarter results and strong operating margins. The company also raised its capital expenditure plan to reflect more spending on data centers, and higher cost of infrastructure hardware due to tariff uncertainty. "I want to make sure that we're building out the leading infrastructure and teams that we need to achieve our goals," CEO Mark Zuckerberg said. Investing Group Leader Victor Dergunov said the higher spending target "is another solid sign for Meta and the broader AI industry." Next up: The last two Big Tech companies - Apple (AAPL) and Amazon (AMZN) - will post their quarterly earnings after the bell today. SA analyst A.J. Button said "a lot is riding on" Apple's report, as the iPhone maker is one of the U.S. tech companies that's most impacted by President Donald Trump's tariffs on China. Expectations for Amazon are more optimistic as its cloud and ad services businesses are thriving, according to SA Quant strategist Steven Cress.

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Microsoft forecasts strong growth for Azure cloud business, shares surge 8%

(Reuters) -Microsoft forecast on Wednesday stronger-than-expected quarterly growth for its cloud-computing business Azure after blowout results in the latest quarter, assuaging investor worries in an uncertain economy and lifting its shares 8% after hours. Microsoft's results, which follow similarly above-expectations outcomes from Google last week, could ease concerns about a potential slowdown in AI demand, after some analysts pointed to canceled data-center leases at Microsoft as a sign of excess capacity. Investors had also been worried about the fallout from sweeping U.S. tariffs that are prompting businesses to rein in spending. Microsoft said revenue at its Azure cloud division rose 33% in the third quarter ended March 31, exceeding estimates of 29.7%, according to Visible Alpha. AI contributed 16 percentage points to the growth, up from 13 points in the previous quarter. The company also forecast cloud-computing revenue growth of 34% to 35% on a constant currency basis for the fiscal fourth quarter, well above analyst estimates of 31.8%, according to data from Visible Alpha. The company forecast revenue for its intelligent cloud segment between $28.75 billion and $29.05 billion, with the entire range above analyst estimates of $28.52 billion, according to LSEG data. The company said its commercial bookings growth - which reflects new infrastructure and software contracts signed by business customers - was up 18% in the fiscal third quarter, driven in part by a new Azure contract with ChatGPT creator OpenAI. Microsoft declined to comment on the size of the deal or what role it played in overall Azure sales growth. "In a quarter clouded by tariff fears and AI spending scrutiny, this quarter is a clear win - even if it wasn't fireworks," said Jeremy Goldman, senior director of briefings at E-marketer. "Azure and other cloud services beat Street expectations - and Microsoft Cloud's growth shows it continues to turn AI infrastructure into margin-friendly growth. Still, investors will be watching closely as the company continues to pull back on data center expansion." In the third quarter, Microsoft's capital expenditures rose 52.9% to $21.4 billion, less than estimates of $22.39 billion, according to Visible Alpha. However, the proportion of longer-lived asset expenditures fell to about half of the total. Jonathan Neilson, Microsoft's vice president of investor relations, said that reflected a shift in Microsoft's spending from long-lived assets such as data center buildings toward more spending on shorter-lived assets such as chips. "You plug in CPUs and GPUs, and then you can start recognizing revenue," Neilson said, referring to categories of chips made by Intel, Advanced Micro Devices and Nvidia, among others. The Intelligent Cloud unit, which houses Azure, posted revenue of $26.8 billion, compared with expectations of $26.17 billion. Overall, revenue rose 13% to $70.1 billion, beating estimates of $68.42 billion, according to data compiled by LSEG. Redmond, Washington-based Microsoft reported a profit of $3.46 per share in the quarter, beating expectations of $3.22 per share. The company also benefited from a 6% increase in revenue at its more personal computing unit, which includes Xbox and its line of laptops. Microsoft, which has also repeatedly said it is capacity constrained on AI, has been pouring billions into building its AI infrastructure and expanding its data-center footprint. A senior Microsoft executive reiterated earlier this month that the company would spend $80 billion on its data center build-out this year, and investors will be watching closely to see if it reaffirms that on its post-earnings call. A pullback in Big Tech's AI spending will have big implications for suppliers such as chip giant Nvidia, as well as the U.S. economy. J.P. Morgan analysts estimated in January that data-center spending could contribute between 10 and 20 basis points to U.S. economic growth in 2025-2026. Neilson said inventory levels had already been high during the company's fiscal second quarter as retailers stocked up on computers and gaming consoles on tariff worries. That activity continued into the third quarter, he said. "We expected in Q3 for them to bring inventory levels down to a more normal level. What we actually saw was inventory levels remained elevated," Neilson said. "There continues to be some uncertainty there." (Reporting by Deborah Sophia and Aditya Soni in Bengaluru and Stephen Nellis in San Francisco;Editing by Sayantani Ghosh and Matthew Lewis) By Deborah Mary Sophia, Stephen Nellis and Aditya Soni

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Big Tech: Microsoft, Meta beat forecasts, calm investor jitters

STORY: Tech giants Microsoft and Meta have shaken off fears of an unsteady economy or AI slowdown, for now at least. Both of them beat analyst forecasts on Wednesday. Microsoft's Azure cloud division in particular grew by a third over the quarter. The company says about half of that was contributed by AI - news that could ease worries about a slowdown in demand for the new tech. Some analysts had previously pointed to canceled data-center leases by Microsoft as a sign of excess capacity. Now the company says it sees strong growth ahead for the cloud business, forecasting some $29 billion in revenue. Its shares jumped around 7% in after-hours trade on the news of the results. Meanwhile, Meta beat estimates with $42 billion in revenue last quarter. It also said its daily active users across Facebook, Instagram and the rest of its services rose 6% year-on-year, marking welcome news for advertisers. Meta also said it's planning to spend more as it speeds up building data centers that can support AI. CEO Mark Zuckerberg previously said the company would shell out $65 billion this year - the company said yesterday that could now go as high as $72 billion. He said nearly 1 billion people were now using Meta's AI assistant on a monthly basis.

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Big Tech's fortunes diverge as AI powers cloud, tariffs hit consumer electronics

(Reuters) -The fortunes of Big Tech are diverging in a rapidly changing business landscape, as demand for artificial intelligence fuels growth in cloud and digital ads while consumer electronics take a battering from President Donald Trump's global trade war. AI came to the rescue of earnings at Microsoft and Google-parent Alphabet in their March quarter, offering investors hope that their billion-dollar bets on the technology would help them ride out the fallout from sweeping U.S. tariffs.Their upbeat commentary stood in stark contrast to gloomy predictions from companies more exposed to tightening consumer budgets: chipmakers Qualcomm, Samsung Electronics, and Intel warned that economic uncertainty caused by Trump's attempts to reorder global trade was hurting their businesses. The split highlights how enterprise-focused firms are holding steady despite economic jitters, while a pullback in consumer spending is weighing on demand for smartphones, personal computers, and the chips that power them. This could spell trouble for Apple, which makes 90% of its products in China and generates about half its revenue from iPhone sales. Amazon.com's e-commerce business could be hit as well, though its cloud division - which accounts for most of its profit - is expected to hold up like Microsoft and Google's. Amazon and Apple are scheduled to report results on Thursday after market close. "There hasn't been an impact on their (Google and Microsoft's) businesses yet because they're not in the consumer business. As we get into Apple and Amazon, that may be a little different," said D.A. Davidson analyst Gil Luria. "Apple is going to be impacted, there's very little that they can do to avoid some impact due to tariffs. With Amazon, the disruption is a little more pronounced on the retail side because many of their merchants are in China." The Trump administration has so far spared electronics from tariffs, but Washington has signaled that some levies could be imposed in the coming weeks. Apple will try to mitigate tariffs by shifting production of U.S.-bound iPhones to India, Reuters has reported, but it is likely to keep price increases to a minimum to avoid losing market share and would have to stomach any elevated costs. Some third-party merchants on Amazon, who sell China-made goods during the company's buzzy July shopping event, are planning to sit it out this year to protect profit margins, Reuters has reported. AI SPENDING PAYS OFF Samsung, which makes smartphones as well as chips that go in them, struck a more cautious tone, saying "demand uncertainties are growing in the second half as a result of recent changes in tariff policies in major countries." Mobile chip designer Qualcomm on Wednesday forecast third-quarter revenue that would miss estimates, reflecting the impact from tariffs. Apple is known to be Qualcomm's biggest customer. Microsoft on Wednesday reported a stronger-than-expected 33% jump in revenue in its Azure cloud business and forecast an acceleration in growth. Alphabet last week posted an 8.5% rise in its mainstay ad sales, as the integration of AI into Google search increased its appeal to advertisers. Facebook-parent Meta on Wednesday also topped revenue expectations on strong ad sales. But Meta's smaller rival Snap said on Tuesday it would not issue a quarterly forecast due to economic uncertainty, as advertisers favor bigger platforms in tough times. Shares of Microsoft surged more than 8% in premarket trading, while those of Meta were up 6.4%. Qualcomm fell 5.4%, while AI chip suppliers Nvidia, Advanced Micro Devices and Broadcom each gained more than 3%. "Through April, demand signals across our commercial businesses as well as in LinkedIn, gaming and search have remained consistent," Microsoft CFO Amy Hood told analysts. Some analysts said the strong results from Microsoft suggested that fears the tech giants may have added too much data center capacity to support AI demand may have been overblown. The Windows maker, whose shares have declined 6% this year, had been under pressure after analysts' reports said it canceled some data center leases in a potential sign of oversupply. But on Wednesday, the company said that AI's contribution to Azure growth increased to 16 percentage points in the March quarter, from 13 percentage points in the previous three months. "The big improvement in AI contribution shows the high potential for AI once capacity becomes available," Barclays analysts said in a note. Microsoft, which plans to spend $80 billion on AI infrastructure this fiscal year, warned it remains supply-constrained, mirroring comments from Alphabet. "We had hoped to be in balance (cloud capacity) by the end of the fourth quarter. We did see some increased demand, as you saw through the quarter, so we are going to be a little short, a little tight as we exit the year, but are encouraged by that," Microsoft's Hood said. (Reporting by Aditya Soni and Deborah Sophia in Bengaluru; Editing by Sayantani Ghosh and Shri Navaratnam)

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US tech-related stocks jump after Microsoft, Meta Platforms results

NEW YORK (Reuters) -U.S. technology-related stocks including many involved in artificial intelligence rose sharply on Thursday following stronger-than-expected results from Microsoft and Meta Platforms, while investors awaited results from Apple and Amazon.com after the closing bell. Shares of Microsoft jumped 8.7% and Meta Platforms gained 4.5%, while AI heavyweight Nvidia was up 4%. Also in the AI space, Advanced Micro Devices rose 1.1%, Broadcom was up 4% and Super Micro Computer gained 4.7%. Shares of Amazon climbed 2.9%, while Apple was roughly flat as a federal judge ruled the iPhone maker had violated a U.S. court order to reform its App Store. Demand for artificial intelligence is fueling growth in cloud and digital ads, but U.S. President Donald Trump's global trade war is still expected to be a risk for many companies, especially more consumer-related names. The top U.S. technology and growth stocks, known as the "Magnificent Seven", had stumbled early in 2025 as investor concerns about the economic fallout from Trump's tariffs grew. Even though the group has rebounded since Trump paused many of his heftiest tariffs on April 9, investors are closely watching their results. "They've been the strength of this market for the last few years, and the qualities that give them that strength really haven't changed much," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey. "AI is still clearly something that is growing and probably not subject to whether consumers pull back some or not in the coming months." Microsoft said late Wednesday that AI's contribution to Azure growth increased to 16 percentage points in its fiscal third quarter, from 13 percentage points in the previous three months. Meta Platforms' report also late Wednesday signaled that its AI-powered tools helped draw advertising dollars despite tariff-related economic uncertainty. However, shares of mobile chip designer Qualcomm were down 8.1% on Thursday. The company late Wednesday forecast third-quarter revenue just shy of Wall Street estimates. Also, earlier this week, Super Micro Computer's shares fell after it cut its revenue forecast. (Reporting by Caroline Valetkevitch; Editing by Susan Fenton and Diane Craft)

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Microsoft forecasts strong growth for Azure cloud business, shares surge 7%

(Reuters) - Microsoft forecast on Wednesday stronger-than-expected quarterly growth for its cloud-computing business Azure after blowout results in the latest quarter, calming investor worries in an uncertain economy and lifting its shares 7% after hours. Microsoft's results, which follow similar outcomes from Google last week, could ease concerns about a potential slowdown in AI demand, after some analysts pointed to canceled data-center leases at Microsoft as a sign of excess capacity. Investors had also been worried about the fallout from sweeping U.S. tariffs that are prompting businesses to rein in spending, but robust advertising sales at Meta Platforms suggested that is so far not happening. The rise in Microsoft's shares set it on course to add more than $200 billion to its value. Microsoft said revenue at its Azure cloud division rose 33% in the third quarter ended March 31, exceeding estimates of 29.7%, according to Visible Alpha. AI contributed 16 percentage points to the growth, up from 13 points in the previous quarter. The company also forecast cloud-computing revenue growth of 34% to 35% on a constant currency basis for the fiscal fourth quarter to between $28.75 billion and $29.05 billion, well above analyst estimates, according to data from Visible Alpha. Commercial bookings growth - which reflects new infrastructure and software contracts signed by business customers - rose 18% in the fiscal third quarter, driven in part by a new Azure contract with ChatGPT creator OpenAI. Microsoft declined to comment on the size of the deal or what role it played in overall Azure sales growth. However, Amy Hood, Microsoft's chief financial officer, told investors on a conference call that the AI contribution to the cloud computing business was in line with the company's expectations, while "the real outperformance in Azure this quarter was in our non-AI business." "So the only real upside we saw on the AI side of the business was that we were able to deliver supply early to a number of customers," Hood said. The company's Azure results came after a number of Wall Street analysts had lowered expectations as research reports said Microsoft had ended some data center lease obligations. CEO Satya Nadella said on a conference call that Microsoft has a long history of constantly adjusting its data center plans, but only in recent quarters had analysts started closely scrutinizing those moves. "The numbers were skeptical going in, giving them the room to beat pretty heavy. The beat wouldn't have been this big if we didn't have all these problems," said Dan Morgan, senior portfolio manager at Synovus Trust, referring to tariff uncertainty. SPENDING RISES FOR SHORTER-LIVED ASSETS Redmond, Washington-based Microsoft reported a profit of $3.46 per share in the quarter, topping expectations of $3.22 per share. Revenue rose 13% to $70.1 billion, with the Intelligent Cloud unit, which houses Azure, contributing $26.8 billion. In the third quarter, Microsoft's capital expenditures jumped 53% to $21.4 billion, however the proportion of longer-lived asset expenditures fell to about half of the total. Hood told investors that in the company's fiscal 2026, which will begin in July, capital expenditures will continue to grow, but at lower growth rates than for the current year and with more of an emphasis on shorter-lived assets. That reflected a shift in Microsoft's spending on assets such as data center buildings toward assets such as chips, said Jonathan Neilson, Microsoft's vice president of investor relations. "You plug in CPUs and GPUs, and then you can start recognizing revenue," Neilson said, referring to categories of chips made by Intel, Advanced Micro Devices and Nvidia, among others. Microsoft, which has repeatedly said it is capacity constrained on AI, has been pouring billions into building its AI infrastructure and expanding its data-center footprint. A pullback in Big Tech's AI spending would have big implications for suppliers such as chip giant Nvidia, as well as the U.S. economy. J.P. Morgan analysts estimated in January that data-center spending could contribute between 10 and 20 basis points to U.S. economic growth in 2025-2026. (Reporting by Deborah Sophia and Aditya Soni in Bengaluru and Stephen Nellis in San Francisco; Editing by Sayantani Ghosh, Matthew Lewis and Sonali Paul) By Deborah Mary Sophia, Stephen Nellis and Aditya Soni

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Meta, Microsoft reports lift AI-related stocks

(Reuters) -Shares in artificial intelligence and cloud-computing-related companies were rising sharply in late trade on Wednesday after Meta Platforms and Microsoft results beat Wall Street expectations. The reports appeared to boost demand for shares in AI chip leader Nvidia Corp, which rose 2.8% in late trading, and chip rival Advanced Micro Devices, which rose 2%. Shares in Amazon.com, which competes with Microsoft in cloud-computing and is due to report results on May 1, were up 3% with strong after-the-bell volume. Google parent Alphabet shares were up more than 1% after the reports. Shares in Microsoft soared more than 6% in late trading after it topped quarterly revenue expectations on strong Azure cloud-computing growth, reassuring investors its hefty AI investments were paying off. Shares in social media company Meta Platforms were up more than 4%, after it also beat Wall Street estimates for first-quarter revenue, signaling that its AI-powered tools helped draw advertising dollars despite tariff-related economic uncertainty. Shares in smaller AI-related tech company Super Micro Computer briefly rose sharply after the reports but then pared gains and were last up 0.7%. In the regular session on Wednesday Super Micro Computer shares had tumbled 11% after it slashed its revenue forecast. (Reporting by Sinéad Carew; Editing by Sandra Maler)

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