Home Microsoft’s earnings secure 87% jump in stock over two years as AI division surpasses expectations

Microsoft’s earnings secure 87% jump in stock over two years as AI division surpasses expectations

Microsoft CEO Satya Nadella has indicated the company’s AI division will soon reach a $10 billion annual run rate, as the company’s stock secured a massive 87% jump.  

He was speaking on a conference call on Wednesday following the US tech giant’s quarterly earnings report which showed that its Azure cloud business is driving additional revenue, as well as a significant contribution from the Microsoft 365 productivity arm.

Nadella said, “Our AI business is on track to surpass an annual revenue run rate of $10 billion next quarter, which will make it the fastest business in our history to reach this milestone.”

Microsoft’s third-quarter earnings proved to be the strongest of its entire five-decade history as the company reaps the rewards from its latest generation AI offerings. 

It posted record earnings of $3.30 per share and a net income of $24.7 billion, smashing average analyst estimates which came in at $3.10 EPS and $23.2b as reported by Forbes

The surge is reflected in the jump of 87% in its stock over the last two years, far exceeding Apple’s rise of 50% for the same period.

AI solutions to address the biggest opportunities and challenges

$65.6b in revenue was recorded over the three-month period up to the end of September, beating the estimated $64.6b as well as the previous quarter’s $64.7b record.

Microsoft’s cloud computing business Azure posted sales of 33% year-over-year, smashing expectations of 28.6% growth for the generative AI platform.

Overall, Microsoft’s shares were up by 2% in after-hours reading on Wednesday.

The company – which this week accused Google of operating ‘shadow campaigns’ – is seeing continued growth and demand for AI features after the implementation of the tech into its core services, including the Bing search engine and Edge browser. Further offerings have been embedded in Windows and Office software packages. 

“Organizations are asking not only how, but how fast, they can apply this next generation of AI to address the biggest opportunities and challenges they face — safely and responsibly,” added Microsoft chief Nadella in his statement.

Image credit: Via Ideogram

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Graeme Hanna
Tech Journalist

Graeme Hanna is a full-time, freelance writer with significant experience in online news as well as content writing. Since January 2021, he has contributed as a football and news writer for several mainstream UK titles including The Glasgow Times, Rangers Review, Manchester Evening News, MyLondon, Give Me Sport, and the Belfast News Letter. Graeme has worked across several briefs including news and feature writing in addition to other significant work experience in professional services. Now a contributing news writer at ReadWrite.com, he is involved with pitching relevant content for publication as well as writing engaging tech news stories.

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.