- North Korea fires 'long-range' ballistic missile, Seoul says
- Trump trash talks Harris as Democrat fends off 'garbage' fallout
- Majority of Mexican Supreme Court judges resign after judicial reforms
- Funding hurdle at world's biggest nature protection summit
- Man Utd target Amorim as caretaker boss Van Nistelrooy says 'I'm here to help'
- Meta shows strong growth as AI spending surges
- Microsoft beats expectations, but AI concerns force shares down
- Argentina hit by massive transport strike
- New Zealand rolls eyes at Joe Marler's haka jibe before England Test
- Man Utd hit five to start life after Ten Hag, Man City out of League Cup
- Inter keep pace with Napoli as stuttering Juve lose ground again
- Musiala hits hat-trick as Bayern cruise into German Cup last 16
- Man Utd hit five to start life after Ten Hag, Arsenal, Liverpool into League Cup quarters
- New Hezbollah chief says open to truce with Israel if offer is made
- Spain’s warning system under scrutiny as flood toll rises
- Stocks mostly retreat, bitcoin close to record high
- I'll be back-ing Kamala: Schwarzenegger says supporting Harris
- France court jails ex-doctor in latest Rwandan genocide trial
- Champions Inter Milan thump Empoli in Serie A
- Johnson the inspiration for England's Itoje as All Blacks lie in wait
- US, S.Korea call for North to withdraw troops from Russia
- In hurricane-hit N.Carolina, voters find a way to cast ballots
- Yankee fans who interfered with Betts grab barred for game five
- Spain races to save victims as floods kill 95
- Lebanon hospital's burns unit bears scars of Israel-Hezbollah war
- Migrant dies trying to cross Channel, three more bodies found
- Spain races to save victims as floods kill 73
- Smog-beset Pakistan megacity curbs rickshaws, restaurants
- England captain Stokes's house burgled by masked robbers while family inside
- McDavid will miss 2-3 weeks with ankle injury for NHL Oilers
- Brussels hopes to advance Ukraine, Moldova entry talks in 2025
- Georgia president refuses prosecutors' summons after alleging vote-rigging
- First case of latest mpox variant detected in UK: health authority
- I'll be backing Harris: Schwarzenegger endorses Democratic ticket
- Stocks diverge, bitcoin close to record high
- Harris fends off 'garbage' fallout, Trump pushes 'cheating' claims
- 'Peace among ourselves' crucial to save nature: UN chief
- French court acquits man who killed incurably ill wife
- New Hezbollah chief open to truce with Israel if offer is made
- Brazil trial begins over murder of iconic activist Franco
- Russia eats away at territory, and Ukrainian morale
- Trump's election fraud claims raise alarms of 2020 repeat
- Spain races to save victims as floods kill 72
- UK's Labour govt hikes taxes in first budget
- Medvedev loses to Australian Popyrin at Paris Masters
- Germany dodges recession but inflation rises sharply
- Harris seeks distance from Biden 'garbage' comments
- Spain races to save victims as floods kill 64
- Riyadh Air orders 60 Airbus planes
- US economic growth solid despite slight slowdown as election nears
Microsoft beats expectations, but AI concerns force shares down
Microsoft delivered solid quarterly results on Wednesday, beating analyst expectations with revenue jumping 16 percent to $65.6 billion, but questions were raised about the company's big spending on the AI boom.
The tech giant reported net income of $24.7 billion for the quarter ending September 30, marking an 11-percent increase from the same period last year. Earnings per share rose 10 percent to $3.30.
The company attributed the solid performance to robust growth in its cloud computing and artificial intelligence businesses.
"AI-driven transformation is changing work... and workflow across every role, function, and business process," said Microsoft CEO Satya Nadella, adding that the company was winning new customers through its AI platforms and tools.
The Redmond-based company has been at the forefront of the generative AI revolution, largely thanks to its partnership with OpenAI, the creator of ChatGPT.
The company has rolled out AI features at a furious pace, mainly under its Copilot brand, leaving investors hopeful for a return on investment from the expensive technology.
But the tech giant warned that its gross margin outlook for its crucial cloud division, or how much money it expects to make, was going to be lower just as its investment in AI infrastructure was set to grow.
The news sent Microsoft's share price down by nearly four percent in after-hours trading.
"Microsoft's latest earnings came in a bit above expectations, but the results may leave some investors wanting more clarity," said Emarketer senior director Jeremy Goldman.
"The true wildcard this quarter has been Microsoft's AI investments. It's pouring cash into building out infrastructure, with major capex implications. Yet, the revenue returns from AI remain more of a promise than a present reality," he added.
Azure, Microsoft's cloud computing platform, saw strong growth with revenue increasing 34 percent, when adjusted for currency fluctuations.
During the quarter, Microsoft also returned $9.0 billion to shareholders through dividends and share repurchases, helping pump up share value.
With the jitters over Microsoft's massive outlays on AI, the company has trailed other tech giants on Wall Street this year, gaining just over 15 percent, while Meta has surged 70 percent and Amazon climbed nearly 30 percent.
In a notable development, Microsoft's gaming division showed substantial growth, with Xbox content and services revenue surging 61 percent, primarily due to the recent Activision Blizzard acquisition, which contributed 53 percentage points to this increase.
Google parent company Alphabet on Tuesday set the scene for the tech earnings season with a solid report, as its cloud computing division posted strong results on the back of AI adoption by search engine users.
P.Martin--AMWN