Microsoft and Meta's Strong Results Quell AI Spending Concerns, Boosting Tech Sector

Microsoft beats quarterly revenue estimates as AI shift bolsters cloud demand

April 30 (Reuters) - Microsoft (MSFT.O), opens new tab 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 (GOOGL.O), opens new tab 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 Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Meta, Microsoft reports lift AI-related stocks

April 30 (Reuters) - Shares in artificial intelligence and cloud-computing-related companies were rising sharply in late trade on Wednesday after Meta Platforms (META.O), opens new tab and Microsoft (MSFT.O), opens new tab results beat Wall Street expectations. The reports appeared to boost demand for shares in AI chip leader Nvidia Corp (NVDA.O), opens new tab, which rose 2.8% in late trading, and chip rival Advanced Micro Devices (AMD.O), opens new tab, which rose 2%. Shares in Amazon.com (AMZN.O), opens new tab, 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 (GOOGL.O), opens new tab 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 (SMCI.O), opens new tab 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 (AI.N), opens new tab were up 1% but volume was lighter. Reporting by Sinéad Carew; Editing by Sandra Maler Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

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

May 1 (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 (MSFT.O), opens new tab and Google-parent Alphabet (GOOGL.O), opens new tab 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 (QCOM.O), opens new tab, Samsung Electronics (005930.KS), opens new tab, and Intel (INTC.O), opens new tab 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 (AAPL.O), opens new tab, which makes 90% of its products in China and generates about half its revenue from iPhone sales. Amazon.com's (AMZN.O), opens new tab 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 (META.O), opens new tab on Wednesday also topped revenue expectations on strong ad sales. But Meta's smaller rival Snap (SNAP.N), opens new tab 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 (NVDA.O), opens new tab, Advanced Micro Devices (AMD.O), opens new tab, and Broadcom (AVGO.O), opens new tab 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 Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

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

NEW YORK, May 1 (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 (MSFT.O), opens new tab jumped 8.6% and Meta Platforms (META.O), opens new tab gained 4.8%, while AI heavyweight Nvidia (NVDA.O), opens new tab was up 4.3%. Also in the AI space, Advanced Micro Devices (AMD.O), opens new tab rose 1.2%, and Broadcom (AVGO.O), opens new tab and Sun Micro Computer (SMCI.O), opens new tab both gained 3.5%. Shares of Amazon (AMZN.O), opens new tab climbed 2.7%, while Apple (AAPL.O), opens new tab 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 (QCOM.O), opens new tab 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 Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Business

Microsoft, Meta results signal concerns about AI spending were overblown. Wall Street gives the winners from here

Big Tech companies are continuing to spend on artificial intelligence infrastructure and data center buildouts, quieting concerns about their growth and reviving investor sentiment in other parts of the AI market. Quarterly results from Microsoft and Meta released on Wednesday indicated that both giants are maintaining their AI spending plans despite the threat of tariffs, which could raise costs for data center parts that come from overseas. Wall Street cheered the results as both stocks rallied. "Contrary to investors' worries of slowing capex, it appears that spending for AI continues to be unabated," Citi analyst Christopher Danely wrote in a Thursday note to clients. "AI infrastructure buildouts remain as key priorities for hyperscalers with the companies' willingness to absorb the costs of tariffs. We view this as positive for AI-exposed stocks." Microsoft on Wednesday reported that its capital expenditures, excluding finance leases, reached $16.75 billion for its fiscal third quarter, up nearly 53%. CEO Satya Nadella said earlier this year that Microsoft plans to spend $80 billion in fiscal 2025. Meta, meanwhile, increased its 2025 capital expenditures to partly reflect an "increase in the expected cost of infrastructure hardware," from suppliers who source from countries around the world, the company said. According to Citi's Danely, confirmation about hyperscaler spending is good news for stocks such as chipmakers Broadcom , Advanced Micro Devices , Micron Technology as well as Monolithic Power Systems , which makes power circuits for systems in cloud computing and other applications. Shares of Broadcom, which works on Google's custom AI chips, are down 15% this year but have notably jumped more than 16% over the past month after the company beat first-quarter expectations . Broadcom recorded recorded $4.1 billion in AI revenue during the period, 77% higher on a year-over-year basis, as the company touted continued strength in its AI semiconductor revenue. JPMorgan analyst Samik Chatterjee and Barclays analyst Tim Long similarly pointed to the hyperscaler results as a sign that robust investment momentum is still alive, and named cloud and networking products providers as beneficiaries. "We view the latest earnings reports by the US CSPs as corroborating our expectations that there is likely limited near-term impact relative to capex trajectories despite broader investor concerns around a slowdown in AI investments, which has been compounded in recent months given the tariff volatility," Chatterjee wrote in a Wednesday note to clients. In light of the hyperscaler results, Chatterjee said he continues to look favorably on companies with leverage to cloud demand, such as Arista Networks , Amphenol and Coherent . Chatterjee added Arista to the firm's "Analyst Focus List" in April, with catalysts for upside on the stock including anticipated acceleration in revenue growth in 2026 and 2027, driven by higher adoption of ethernet in artificial intelligence data centers. Long similarly views Arista as a beneficiary, pointing out that roughly 35% of the company's revenue came from Microsoft and Meta in fiscal year 2024. "ANET's share at MSFT is already significant at 60%+ and higher AI spending could drive more switching business for them," Long said.

Microsoft Profit Increases 18% While It Slows A.I. Spending

Sign up for the On Tech newsletter. Get our best tech reporting from the week. Get it sent to your inbox. 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 put 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 is still on track to spend more than $80 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 A.I. is not limitless. Overall, Microsoft's results showed unexpected strength in its business. Sales surpassed $70 billion, up 13 percent from the same period a year earlier. Profit rose to $25.8 billion, up 18 percent. The results far surpassed Wall Street's expectations. "Cloud and A.I. are the essential inputs for every business to expand output, reduce costs, and accelerate growth," Satya Nadella, Microsoft's chief executive, said in a statement. Microsoft's stock price increased more than 5 percent 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 fully supply the cloud computing and artificial intelligence services its customers wanted. Sales of Microsoft's flagship cloud computing service, Azure, grew 33 percent 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 A.I. systems. OpenAI is now expected to work with the 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. (The New York Times has sued OpenAI and Microsoft, claiming copyright infringement of news content related to A.I. systems. The two companies have denied the suit's claims.) 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.'" Microsoft's personal computing business grew 6 percent to $13.4 billion. Commercial sales for its online productivity tools for businesses, including Excel, Teams and Word, grew 15 percent. 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.

Microsoft to report earnings as AI financial boom shows no sign of slowing

Company has beaten Wall Street expectations in each of its previous three quarterly earnings reports Microsoft will report its earnings for the third quarter of the fiscal year after the stock market closes on Wednesday. Analysts have predicted that revenue would grow by 10.6% year-over-year to $68.4bn, even as the company plows tens of billions into artificial intelligence as well as earnings-per-share of $3.22. The company has beaten Wall Street's expectations on each of its previous three quarterly earnings reports. Analysts said they view the earnings report as a temperature check on Microsoft's artificial intelligence business, which has announced it will invest around $80bn in this fiscal year alone, though it has also terminated some data center leases in recent months. The company has invested billions in OpenAI in recent years, giving it a large stake in the ChatGPT developer. Microsoft's heavy bets on AI, which extend to deals with companies beyond OpenAI, has led to Microsoft and its investors being reliant on the technology's success and widespread adoption. Microsoft has, meanwhile, framed its investments in AI as putting it at the forefront of a world-changing technology it claims is crucial to the future of American industry. "Not since the invention of electricity has the United States had the opportunity it has today to harness new technology to invigorate the nation's economy," Smith claimed in a January blogpost. "In many ways, artificial intelligence is the electricity of our age." Microsoft executives have also been heavily touting an AI-driven future in recent appearances. Nadella claimed earlier this week that 20% to 30% of the company's code was written by AI, although did not give specifics on how that number was calculated. Chief technology officer Kevin Scott, meanwhile, predicted on a podcast this month that 95% of code would be AI-generated within the next five years. Last quarter, Microsoft reported a 12% increase in revenue and touted growth in its AI business - which it reported saw an increase of 175% year over year. Investors have also been keeping an eye on how Microsoft's Azure cloud computing service is performing after a fall in revenue last quarter. The company has been seeking to expand Azure throughout Europe, with President Brad Smith also promising Microsoft will expand its European data centers by 40% over the next two years. Earlier in the day, Microsoft president Brad Smith said Microsoft would sue to overturn any command to cease operations in the European Union. The remark comes as Donald Trump's trade policies ratchet up tension between the US and EU. "In the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe, we are committing that Microsoft will promptly and vigorously contest such a measure using all legal avenues available, including by pursuing litigation in court," he said at a European tech conference. Several of the world's largest tech companies, including Amazon, Meta and Apple, are all reporting quarterly earnings this week in what will be a bellwether of how the industry is navigating the larger economic downturn and Trump administration tariffs. Tesla, the world's most valuable automaker, also released its worse-than-expected earnings last week, which revealed the company had suffered a 71% loss in profits compared with the previous year amid a backlash against Elon Musk. While other tech giants such as Apple and Amazon are exposed to heavy financial risks related to the Trump administration's erratic tariff policies, Microsoft has been relatively insulated, given that its products and services are less dependent on trade. Shares in Microsoft have fallen around 7% overall since January, a downturn in part caused by wider economic instability as well as China-based developers closing the gap in AI. The release in January of the DeepSeek AI app, a chatbot similar to OpenAI's ChatGPT, caused a rapid selloff in Microsoft shares. Microsoft has since integrated DeepSeek's technology into some of its products.

Microsoft and Facebook ride AI business to earnings beat

The big picture: Microsoft and Meta gave no indications of a growth slowdown as the AI economy continues to surge. Zoom in: Meta projected that its 2025 capital expenditures will rise from a previous range of $60 billion -- $65 billion to a new range of $64 billion -- $72 billion, reflecting "additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware." At Microsoft, revenue in the company's server products and cloud services segment soared 22% as the company's Azure service grows in popularity. The impact: Microsoft's stock rose 5.5% in after-hours trading at 4:20pm, while Meta was up 3.3%. Yes, but: Microsoft noted in an earnings presentation that inventory levels in its Windows OEM and Devices segment remain "elevated due to tariff uncertainty."

Microsoft 365 and Azure revenues push company results to another record high

Microsoft CEO Satya Nadella says cloud and AI demand has been the key drivers for its latest spectacular revenue growth for its most recent quarter, ending March 31, 2025. Of the $70.1 billion in third-quarter revenue, Microsoft Cloud revenue stood at $42.4 billion, up a notable 20% year-over-year. The company also saw a 33% increase to Azure and other cloud service revenues. In fact, it was a strong-performing quarter across the board for the company, including for consumer-facing products like Xbox, Windows OEM and devices, and Microsoft 365. Thanks to the huge growth in Azure and other cloud services, driven by continued interest in artificial intelligence and other powerful cloud computing applications, Redmond noted a 22% increase in revenue for server products and cloud services. The positive news comes just weeks after Microsoft confirmed it would be putting a stop to its $1 billion data center project in Ohio amid cost concerns resulting from trade war-induced tariffs, stating, "after careful consideration, we will not be moving forward at this time with our plans." Speaking on the earnings call, Nadella indicated the company remains committed to expansion in this segment: "We continue to expand our data center capacity. This quarter alone, we opened [data centers] in 10 countries across four continents." On the AI front, Nadella revealed on the earnings call that 15 million people are now using the GitHub Copilot coding assistant - a fourfold increase compared with this time last year. Nadella also noted that "hundreds of thousands of customers across geographies and industries now use Copilot" in Microsoft 365, marking an equally impressive 3x increase year-over-year, but the CEO failed to note exactly how many users the AI assistant has amassed. Consistent growth across the Microsoft 365 services added to the company's financial success, with Commercial products up 11% and Consumer products up 10%.

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.

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%.

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.

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.

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.

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)

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)

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.

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.

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."

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.

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.

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."

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.

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.

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

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.

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)

Microsoft beats revenue estimates as AI shift bolsters cloud demand

(Reuters) -Microsoft topped quarterly revenue expectations on Wednesday, helped by strong growth at its cloud-computing business Azure, reassuring tech investors that hefty AI investments were paying off and sending shares of the company nearly 6% higher in after-hours trading. 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 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, Aditya Soni

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

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

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.

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)

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)