new York At Microsoft, business is going well thanks to popular software and cloud services. In the three months to the end of March, the software company’s sales increased by seven percent year-on-year to $52.9 billion, as Microsoft announced on Tuesday after the US stock market closed.
The bottom line is that the group earned 18.3 billion dollars (16.7 billion euros), around nine percent more than a year ago. Above all, the cloud business related to the Azure platform, which sells computing capacity and applications to other companies on the Internet, continued to grow with a sales increase of 27 percent. Most recently, Unilever had completely switched to the Azure cloud.
The turnover of the subsidiary LinkedIn, the social network for professionals, increased by eight percent. In addition, the PC area cut better than expected with sales of over 13 billion dollars, even if there was a drop in sales of nine percent.
Microsoft is growing more slowly than in previous quarters, when growth rates were still in double digits and the cloud business in particular was always growing by more than 30 percent. Still, Microsoft significantly surpassed Wall Street analysts’ forecasts for both earnings and sales.
The numbers were well received by investors: the share rose by almost nine percent in the after-hours trading.
At the analysts’ conference, CEO Nadella emphasized the “strong development”: “We continue to focus on our three priorities.” These included the use of Microsoft cloud offerings, investments in infrastructure for artificial intelligence (AI) and the group’s software solutions.
Important AI partnership between Microsoft and OpenAI
Microsoft recently entered into a partnership with the AI provider OpenAI, invested 13 billion dollars in the company and built its AI application ChatGPT into its Bing search engine, which has been ailing for many years.
>> Read also: What the AI of OpenAI can do
According to Nadella, the first positive consequences are showing. “We run the most advanced AI models with ChatGPT and Nvidia,” says the CEO. Now they want to make the AI skills available to their own cloud customers. Early adopters of Azure AI included Mercedes-Benz and Shell, as well as Shopify.
But private customers also took advantage of the new offers. “OpenAI is one of the fastest growing consumer apps out there,” Nadella said. Two months after the launch of the new, improved search engine Bing, the number of users had quadrupled. Microsoft feels “very encouraged” by the success.
Wedbush analyst Dan Ives praised the “resilient performance given the macro headwinds”. Above all, the Azure growth, which even amounted to 31 percent after adjusting for exchange rate effects, is a “key to success”.
Hargreaves Lansdown analyst Sophie Lund-Yates sees Microsoft successfully “riding the AI wave.” The group is playing “at the forefront in the potential monetization of this phenomenal technology. The fact of the matter is that artificial intelligence can be built into most existing Microsoft products.”
With agency material
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First publication: April 25, 2023, 10:20 p.m. (last updated: April 26, 2023, 12:55 a.m.)