After Microsoft (MSFT) reported fiscal first-quarter earnings that topped analysts’ estimates, CFO Amy Hood instructed buyers on the corporate’s earnings name that demand for artificial intelligence (AI) “continues to be increased than our obtainable capability.”
Microsoft’s Clever Cloud section, which incorporates the Azure cloud computing platform, led development within the quarter. Income from the section jumped 20% year-over-year to $24.09 billion as demand for AI surged, although analysts had anticipated extra.
The Quickest-Rising Enterprise in Microsoft’s Historical past
CEO Satya Nadella stated utilization of Azure’s Open AI service greater than doubled over the previous six months, with Microsoft’s AI enterprise on monitor to achieve an annual income run fee of $10 billion within the second quarter, which might make it “the quickest enterprise in our historical past to achieve this milestone.”
“We’re seeing AI drive a elementary change within the enterprise functions market as prospects shift from legacy apps to AI first enterprise processes,” Nadella stated.
Cloud Progress Might Sluggish Earlier than Choosing Up within the Second Half of 2025
Hood stated Microsoft expects Clever Cloud development might gradual to between 18% and 20% within the second quarter, with Azure’s development anticipated to decelerate to between 31% and 32%, earlier than dashing up once more within the again half of the fiscal yr.
Shares of Microsoft slid about 3% in prolonged buying and selling following the earnings name. They had been up 15% for 2024 by means of Wednesday’s shut.