Microsoft invests record $30 billion in AI, Azure sales explode

Microsoft (MSFT.O) on Wednesday forecast a record $30 billion in capital expenditures for the current fiscal first quarter, after booming sales of its Azure cloud computing unit showed growing returns from its big investments in artificial intelligence.

Shares of the software company jumped 9% in extended trading after the company announced Azure sales topped $75 billion annually, the first time the company has disclosed that figure, beating expectations of $74.62 billion.

Microsoft outspends rivals on AI spending. Google is expected to spend $85 billion, Meta forecasts revenue growth with a slight increase in costs. The three tech giants’ combined capital spending will reach $330 billion this year. Microsoft and Meta’s results have helped AI stocks add $500 billion to their value.

"I'm very pleased that the spending we're doing is directly tied to the contracts we've signed, the transactions we've booked that we need to close," Microsoft CFO Amy Hood said on a conference call with investors.

While Microsoft’s cloud business still lags Amazon Web Services (AMZN.O) – which brought in $107.56 billion in revenue in its most recent fiscal year – investors say Microsoft’s new revenue figures show investments are translating into increased sales.

"The fact that Microsoft released that number really helps justify the huge investments," said Dave Wagner, portfolio manager at Aptus Capital Advisors, which holds Microsoft shares.

Rival Alphabet (GOOGL.O) also showed rising AI spending last week, as did profits, beating revenue estimates and raising its spending forecast by $10 billion.

Microsoft said Azure revenue grew 39% in the June quarter, beating the average analyst estimate of 34.75%, according to Visible Alpha. The company expects 37% growth for the current quarter, beating analysts' estimates of 33.5%.

Microsoft said the spending is crucial to overcoming supply constraints that have hampered its ability to meet surging AI demand. The estimated $30 billion in capital expenditures for the first fiscal quarter beat analysts' expectations of $23.75 billion.

In the just-ended fourth fiscal quarter, capital spending rose 27% to $24.2 billion, compared with estimates of $23.08 billion.

Microsoft also said its AI tool Copilot has surpassed 100 million monthly active users, the first time the company has provided such a figure. Google has announced that its rival Gemini has 450 million active users.

Microsoft's total revenue rose 18% to $76.4 billion in the April-June period, its fourth fiscal quarter. Analysts on average expected $73.81 billion.

Source: https://baonghean.vn/microsoft-dau-tu-ky-luc-30-ty-usd-vao-ai-doanh-so-azure-bung-no-10303574.html