Microsoft Q4 results: ‘they’re at top of the mountain to monetise AI’

July 25, 2023 03:34 PM PDT | By Invezz

Microsoft Q4 results: ‘they’re at top of the mountain to monetise AI’ — Image source: Invezz

Azure slowed down in the fourth quarter

Investors seem unhappy with Azure, though, which came in down sequentially. Still, Dan Ives – a Senior Analyst at Wedbush Securities said today on CNBC’s “Closing Bell: Overtime”:

They’re gaining market share from AWS. They’ll gain more and more share. We believe for every $100 of cloud spend, they can gain an incremental $35 to $40.

Note that the cloud platform saw a 27% year-on-year increase in revenue (constant currency) that was, nonetheless, in line with Street estimates.

Microsoft stock is currently up roughly 45% for the year.

Microsoft Q4 earnings snapshot

Net income climbed from $16.7 billion to $20.1 billion
Per-share earnings also improved from $2.23 to $2.69
Revenue went up 8.0% year-on-year to $56.2 billion
Consensus was $2.55 a share on $55.5 billion in revenue
Operating margin stood at 43% – up 400 basis points

Microsoft Corp performed better-than-expected in all three of its segments in the fourth quarter. According to Wedbush analyst:

You look at these numbers, it’s hard to pick holes in it. It’s a stock that 24 hours from now will be green as long as forecast is in line to slightly higher. I view this as a $3.5 trillion market cap in a year.

What else was noteworthy?

Other notable figures include an 8.0% increase in search and news advertising (ex-TAC).

Microsoft did not, however, comment on the performance of its AI-enabled “Bing” in the press release. Still, Dan Ives noted:

This is all the drum roll to what I view is the key with AI in terms of not just the next quarter – next two to three years. They are at the top of the mountain to monetise AI.

Earlier this month, a U.S. judge rejected FTC’s request for an injunction to prevent Microsoft from buying Activision Blizzard (read more).

The post Microsoft Q4 results: ‘they’re at top of the mountain to monetise AI’ appeared first on Invezz.

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