Microsoft (MSFT) is scheduled to report third-quarter results after the bell on Thursday, as Wall Street continues to look for signs that the AI explosion is more than just hype. Microsoft announced last quarter that its AI capabilities contributed 6 percentage points to its Azure revenue growth, up from 3% in the previous quarter, and analysts are hoping for more.
Microsoft stock has risen more than 10% since the beginning of the year, trailing rivals like Google parent Alphabet (GOOG, GOOGL) and Amazon (AMZN), which are up 15% and 22%, respectively. . Over the past 12 months, Microsoft's stock is up 32%, while Amazon is up 67% and Google is up 47%.
The three companies will decide which can provide the most comprehensive AI solutions to their enterprise customers and customers, whether by investing heavily in third-party companies like OpenAI and Anthropic or restructuring internal teams like Google. are fighting.
Wall Street wants Microsoft to report earnings of $2.83 a share and revenue of $60.88 billion for the current quarter, according to analyst estimates compiled by Bloomberg. In the year-ago period, Microsoft reported EPS of $2.45 and revenue of $52.86 billion.
Analysts expect Microsoft to announce overall commercial cloud revenue for the quarter will increase 19% year over year to $33.93 billion. In terms of business segments, Wall Street expects Microsoft to report productivity and business processes revenue of $19.54 billion, Intelligent Cloud revenue of $26.25 billion and More Personal Computing revenue of $15.07 billion. are doing.
Microsoft's AI ambitions received a healthy boost on Tuesday as Coca-Cola (KO) announced it had signed a five-year, $1.1 billion deal to use AI technology with the software giant's Azure cloud services. .
“Through our long-term partnership, we have made significant progress in accelerating system-wide AI transformation across The Coca-Cola Company and our network of independent bottlers around the world,” said Microsoft Executive Vice President and Chief Commercial Officer. said Judson Althoff in a statement.
Since we first announced improved Bing and AI chatbots in February 2023, we have continued to release new AI features and services for enterprise and productivity apps and consumer platforms.
In March, Microsoft announced that it had hired Mustafa Suleyman, co-founder of DeepMind AI and Inflection AI, Karén Simonyan, also co-founder of Inflection AI, and a number of the company's staff. Suleiman will take up a new role as CEO of Microsoft's AI division.
In February, Microsoft announced a multi-year partnership with French AI startup Mistral that will allow Microsoft to offer its models on the Azure platform.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter @Daniel Howley.
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