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.
Microsoft’s Q1, FY25 earnings report ✨
✅ Revenue grew 16% to $65.6 billion
✅ Operating income grew 14% to $30.6 billion
✅ Earnings: $3.30 per share, up by 10%Keep reading 👇 pic.twitter.com/A2LO5zt3aS
— Jack Rowbotham (@Jackrowbo) October 30, 2024
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