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Microsoft reported its second-quarter earnings, with expectations of $3.13 per share on revenue of $68.8 billion, an increase from last year’s $2.93 per share and $62 billion in revenue. The company’s Commercial Cloud segment grew to $41.1 billion, up from $31.9 billion, while Azure’s Intelligent Cloud segment rose to $25.8 billion, compared to $21.5 billion.
DeepSeek’s announcement of its R1 model, trained on less powerful systems than competitors like OpenAI, boosted the app to the App Store’s top spot, outperforming American AI stocks such as Nvidia. This has affected Microsoft’s stock negatively despite lagging behind Amazon and Google in performance.
Analyst Kirk Materne suggests that Azure growth could accelerate in late 2025 due to increased AI sales, higher Copilot adoption rates, and reduced capital expenditure. Meanwhile, Microsoft aims to stimulate PC sales with its Copilot+ line, though hardware improvements remain the primary driver for PC upgrades.
Microsoft’s success in AI investment and infrastructure highlights its position as a key beneficiary of the industry, despite challenges in stock performance.
Source: https://finance.yahoo.com/news/microsoft-to-report-q2-earnings-as-deepseek-raises-ai-spending-questions-165353921.html