Microsoft said its quarterly profits soared as revenues from its cloud computing division surged to a record level, driven by rampant demand for artificial intelligence services.
Net income increased 24 per cent year on year to $27.2 billion (€23.85 billion), surpassing analysts’ expectations for $25.3 billion in the three months to the end of June, according to a filing on Wednesday.
Revenue rose 18 per cent to $76.4 billion in the quarter, exceeding the average $73.9 billion estimate, compiled by Visible Alpha.
“Cloud and AI is the driving force of business transformation across every industry and sector,” said chief executive Satya Nadella.
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Microsoft shares jumped 7 per cent in after-hours trading. They had previously risen 22 per cent this year as the company is increasingly perceived by investors as a winner from the AI boom. Its stock market capitalisation of $3.8 trillion is second only to US chipmaker Nvidia.
Microsoft for the first time disclosed revenue specifically from its Azure cloud computing division, which it said rose 34 per cent to a record $75 billion in the company’s fiscal year, which ended in June. In the fiscal fourth quarter, its overall cloud business posted revenue of $46.7 billion, up from $36.9 billion in the same period a year earlier.
The company released the breakdown in response to requests from investors, who have lobbied Big Tech groups to show how the vast sums they are spending on artificial intelligence are translating into higher earnings for their data centres and AI products.
Capital expenditure rose to $24.2 billion in the quarter, up 27 per cent versus last year, and from $21.4 billion in the prior three months.
Last week, rival Alphabet boosted its AI spending plans by $10 billion to $85 billion this calendar year after its earnings from cloud computing jumped by almost a third. – Copyright The Financial Times Limited 2025
