Microsoft beat Wall Street estimates for third-quarter revenue on Thursday, driven by gains from AI adoption across its cloud services and business software products.
Revenue rose 17% to $61.9 billion in the quarter ended March, compared with analysts’ consensus estimate of $60.80 billion, according to LSEG data.
Shares of the Redmond, Wash.-based company gained 5% after the bell. The stock has soared on Microsoft shipping genAI tools based on its strategic partnership with ChatGPT creator OpenAI and also helped it capture the world’s most valuable company crown from Apple earlier this year.
Revenue from Microsoft’s Intelligent Cloud unit, which houses the Azure cloud computing platform, rose to $26.7 billion, compared with analysts’ average estimate of $26.24 billion, LSEG data showed.
Azure revenue rose 31%, higher than a 29% growth estimate from market research firm Visible Alpha.
Microsoft does not break out the absolute revenue figure for Azure, the part of its business best situated to capitalize on booming interest in artificial intelligence.
The Copilot tool – a set of genAI assistants launched in November for $30 a month – along with a recovery in personal computer sales has lifted Microsoft’s enterprise software and Windows businesses.
Still, the costs of AI push were brought to the forefront after Facebook parent Meta Platforms raised its annual expenses and capital expenditure forecasts.
