Microsoft Set to Unveil Q3 Earnings Amidst AI Growth Focus


Microsoft (NASDAQ:MSFT) is poised to announce its fiscal third-quarter earnings after Thursday’s closing bell, with Wall Street eager for insights into the company’s continued expansion in the AI landscape. Following a significant boost in the prior quarter, fueled by AI contributions to Azure revenue, analysts anticipate further growth in this pivotal segment.

Despite Microsoft’s shares rising by more than 10% year-to-date, the company trails behind competitors such as Alphabet’s Google (NASDAQ:GOOG, NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN), which have seen gains of 15% and 22%, respectively, in the same period. Over the last 12 months, Microsoft’s shares have climbed by 32%, though Amazon has surged by 67%, while Google has risen by 47%. The fierce competition among these tech giants centers on providing comprehensive AI solutions to both enterprise and consumer markets, driving heavy investments in third-party firms and internal restructuring efforts.

For the quarter, analysts estimate Microsoft to report earnings per share of $2.83 on revenue of $60.88 billion, reflecting a substantial increase from the same period last year. Expectations are particularly high for overall commercial cloud revenue, with a projected 19% year-over-year growth to $33.93 billion. Segment-wise, analysts anticipate revenue figures for Productivity and Business Processes, Intelligent Cloud, and More Personal Computing to reach $19.54 billion, $26.25 billion, and $15.07 billion, respectively.

Microsoft’s AI endeavors received a significant boost with Coca-Cola (NYSE:KO) signing a five-year, $1.1 billion agreement to leverage the company’s Azure cloud services and AI technology. This partnership aims to accelerate AI transformation across Coca-Cola’s global network.

Judson Althoff, Microsoft’s executive vice president and chief commercial officer, emphasized the progress made through their long-term partnership with Coca-Cola, highlighting the widespread adoption of AI across the company and its bottlers worldwide.

Microsoft’s commitment to AI innovation is evident through its continuous introduction of new features and services across enterprise, productivity, and consumer platforms. Key developments include the recruitment of AI experts Mustafa Suleyman and Karén Simonyan, along with other staff members from DeepMind AI and Inflection AI. Suleyman assumes the role of CEO of Microsoft’s AI division, underscoring the company’s strategic focus on advancing AI capabilities.

Furthermore, Microsoft’s partnership with French AI startup Mistral further solidifies its position in the AI market, enabling the integration of Mistral’s models into the Azure platform.

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