Revealed on
Microsoft surpassed $4 trillion in market capitalisation on Thursday’s market opening after it printed stellar fourth quarter earnings the day before today.
The agency introduced that annual income for its flagship Azure cloud computing platform surpassed $75 billion or round €64.9 billion, a staggering 34% bounce from final 12 months.
The Azure cloud enterprise is a centrepiece of Microsoft’s efforts to shift its focus to synthetic intelligence, however till Wednesday, the agency had not lifted the veil on how a lot cash it makes.
The revelation beat Wall Avenue expectations and happy traders cautious about Microsoft’s ongoing development of expensive new knowledge centres wanted to satisfy cloud computing and AI demand.
Microsoft’s fiscal fourth-quarter revenue was $34.3 billion (€2.8 billion), or $3.65 (€3.19) per share, beating analyst expectations for $3.37 (€2.95) per share.
The software program big’s end-of-year earnings report additionally confirmed a 24% spike within the firm’s quarterly revenue.
“We proceed to scale our personal knowledge heart capability sooner than some other competitor,” CEO Satya Nadella stated on an investor name, boasting that the corporate now has greater than 400 of the sprawling services throughout six continents.
As a cloud computing platform — which implies offering computing energy, storage, and instruments over the web as an alternative of on native servers — Microsoft Azure provides companies and establishments a option to run web sites and apps, retailer and again up knowledge, and analyse large datasets.
It may also be used for synthetic intelligence tasks, giving organisations the infrastructure to construct, prepare, and deploy AI fashions at scale. Briefly, Azure lets firms innovate and develop with out the price and complexity of sustaining their very own {hardware}.
Microsoft launched Azure greater than a decade in the past, however the service has more and more turn into intertwined with its AI ambitions, as the corporate appears to promote its AI chatbot and different instruments to large enterprise clients which are additionally reliant on its core on-line providers.
It nonetheless trails behind its lead competitor, Amazon Internet Companies, which reported $107.6 billion or about €94 billion in income for its fiscal 12 months that resulted in December.
Value-cutting layoffs
Constructing the infrastructure to energy cloud and AI expertise is dear, and Microsoft has regarded for financial savings elsewhere. It introduced layoffs of about 15,000 employees this 12 months whilst its income have soared.
Nadella instructed staff final week the layoffs had been “weighing closely” on him but additionally positioned them as a possibility to reimagine the corporate’s mission for an AI period.
Nonetheless, the general workforce numbers have not modified. The corporate stated it employed 228,000 full-time staff as of June 30, the very same quantity it reported a 12 months in the past, although barely extra of them at the moment are US-based and fewer of them are in product help roles or consulting providers.
Guarantees of a leaner strategy have been welcomed on Wall Avenue, particularly as Microsoft and different tech giants try to justify large quantities of capital spending to pay for the information centres, chips and different elements required to energy AI expertise.
Microsoft did not disclose Wednesday to what extent sweeping US tariffs are affecting its income, however its annual report lists tariffs amongst quite a few dangers the corporate faces.
“Elevated geopolitical instabilities and altering US administration priorities create an unpredictable commerce panorama,” the corporate stated. It additionally stated the “volatility of US tariffs has triggered financial uncertainty and will affect cloud and gadgets provide chain value competitiveness”.