Microsoft saw its revenue increase 13% year over year during the quarter ended Sept. 30, driven by Microsoft Cloud revenue growth that leaped 24%.
The tech giant saw a 13% boost in revenue in Productivity and Business Processes, a 19% increase in revenue in Intelligent Cloud and a 3% rise in More Personal Computing, Microsoft said in a Tuesday (Oct. 24) press release.
“With copilots, we are making the age of AI [artificial intelligence] real for people and businesses everywhere,” Satya Nadella, chairman and CEO of Microsoft, said in the release. “We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers.”
The revenue growth of Microsoft’s cloud computing services was driven by customers’ enthusiasm for AI, The Wall Street Journal (WSJ) reported Tuesday. The company’s cloud computing business, Azure, hosts software from OpenAI, Meta Platforms and other companies involved in AI.
The company’s overall revenue gain exceeded both analysts’ expectations and Microsoft’s growth rate of 11% during the same period last year, according to the report. Its net income increase of 27% also topped Wall Street’s predictions.
In addition, Microsoft’s stock has risen 35% this year — beating the Nasdaq Composite Index’s increase of 25% — because investors believe the company can capitalize on the widespread interest in AI, the report said.
It was reported in March that the three largest cloud-computing providers — Microsoft, Amazon and Google — see generative AI as a business driver.
The three tech firms have been putting the technology front and center in their sales pitches since OpenAI’s ChatGPT became a sensation, WSJ reported March 27. For example, Microsoft has been promoting the efficiencies companies can gain by using AI through the cloud.
In other recent activity around AI, Microsoft on Oct. 10 unveiled AI-powered products to help doctors glean insights from healthcare data. That product launch followed a similar debut the same week from rival Google.
About two weeks earlier, on Sept. 27, Microsoft partnered with Cloudflare to enable businesses to run AI models in the most suitable locations for their needs. This collaboration aims to seamlessly deploy AI models across devices, network edges and cloud environments.
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