Microsoft Earnings Jump as AI Demand Boosts Cloud Unit
Company touts potential that its new AI assistant will power a new era of growth.
Microsoft Corp. (MSFT) today announced financial results for the second quarter of fiscal 2024, ended December 31, 2023.
Revenue was $62.0 billion, an increase of 18% year-over-year, or 16% in constant currency. Operating income was $27.0 billion, an increase of 33%, or 25% in constant currency. Net income was $21.8 billion, or $2.93 per share, compared to $16.4 billion, or $2.20 per share, in the same period last year.
The company's Intelligent Cloud segment produced $25.88 billion in revenue, up 20% year-over-year. The Productivity and Business Processes segment generated $17.58 billion in revenue, an increase of 14%. The More Personal Computing segment had revenue of $18.58 billion, up 11%.
Microsoft CEO Satya Nadella said in a statement that the company's strong results were driven by continued growth in its cloud business and a strong demand for its artificial intelligence (AI) products.
"Our results this quarter reflect the trust customers are placing in Microsoft as their partner in digital transformation," Nadella said. "We are innovating across our businesses to help our customers unlock new opportunities and drive growth."
Microsoft's strong earnings report comes as the company prepares to launch its new AI assistant, ChatGPT, into its Bing search engine and other products. The company has said that it believes ChatGPT has the potential to revolutionize the way people search for information and interact with computers.
Analysts are bullish on Microsoft's stock following the earnings report. J.P. Morgan analyst Mark Murphy raised his price target on Microsoft to $325 from $300 and maintained an "overweight" rating on the stock.
"Microsoft is well-positioned to capture the growth in the AI market," Murphy wrote in a note to clients. "The company's strong cloud business and its partnership with OpenAI give it a significant advantage over its competitors."
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