Microsoft says quarterly profits up 18% as it weathers tech sector turbulence
A Microsoft sign and logo are pictured at the company's headquarters, Friday, April 4, 2025, in Redmond, Wash. (AP Photo/Jason Redmond)
Microsoft on Wednesday said its profits rose 18% for the January-March quarter, driven by its growth in its cloud computing and artificial intelligence business in a turbulent time for the tech sector.
The company reported quarterly net income of $25.8 billion, or $3.46 per share, beating Wall Street expectations for earnings of $3.22 a share.
The Redmond, Washington-based software maker posted revenue of $70.1 billion in the period, its third fiscal quarter, up 13% from the same period a year ago. Analysts polled by FactSet expected Microsoft to post revenue of $68.44 billion for the quarter.
Microsoft is among a group of the tech industry's bellwether companies that have been through a period of uncertainty and turmoil since President Donald Trump returned to the White House, with a see-sawing of stocks that has eviscerated trillions of dollars in shareholder wealth amid an onslaught of tariffs and other actions.
Microsoft's stock price has dropped nearly 8% since Trump's inauguration in January, to about $395 at the close of markets Wednesday.
© Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Times
2 hours ago
- Japan Times
Meta set to throw billions at startup that leads AI data market
Three months after the Chinese artificial intelligence developer DeepSeek upended the tech world with a model that rivaled America's best, a 28-year-old AI executive named Alexandr Wang came to Capitol Hill to tell policymakers what they needed to do to maintain U.S. dominance. The U.S. needs to establish a "national AI data reserve,' supply enough power for data centers and avoid an onerous patchwork of state-level rules, Wang said at the April hearing. Lawmakers welcomed his feedback. "It's good to see you again here in Washington,' Republican Representative Neal Dunn of Florida said. "You're becoming a regular up here.' Wang, the chief executive officer of Scale AI, may not be a household name in the same way OpenAI's Sam Altman has become. But he and his company have gained significant influence in tech and policy circles in recent years. Scale AI uses an army of contractors to label the data that tech firms such as Meta Platforms and OpenAI use to train and improve their AI models, and helps companies make custom AI applications. Increasingly, it's enlisting doctorate holders, nurses and other experts with advanced degrees to help develop more sophisticated models, according to a person familiar with the matter. Put simply: The three pillars of AI are chips, talent and data. And Scale AI is a dominant player in the last of those. Now, the startup's stature is set to grow even more. Meta is in talks to make a multibillion-dollar investment in Scale AI. The financing may exceed $10 billion in value, making it one of the largest private company funding events of all time. The startup was valued at about $14 billion in 2024, as part of a funding round that included backing from Meta. In many ways, Scale AI's rise mirrors that of OpenAI. Both companies were founded roughly a decade ago and bet that the industry was then on the cusp of what Wang called an "inflection point of AI." Their CEOs, who are friends and briefly lived together, are both adept networkers and have served as faces of the AI sector before Congress. And OpenAI, too, has been on the receiving end of an 11-figure investment from a large tech firm. Scale AI's trajectory has shaped, and been shaped by, the AI boom that OpenAI unleashed. In its early years, Scale AI focused more on labeling images of cars, traffic lights and street signs to help train the models used to build self-driving cars. But it has since helped to annotate and curate the massive amounts of text data needed to build the so-called large language models that power chatbots such as ChatGPT. These models learn by drawing patterns from the data and their respective labels. Meta is in talks to make a multibillion-dollar investment in Scale AI. | Bloomberg At times, that work has made Scale AI a lightning rod for criticisms about the unseen workforce in places such as Kenya and the Philippines that supports AI development. Scale AI has faced scrutiny for relying on thousands of contractors overseas who were paid relatively little to weed through reams of online data, with some saying they have suffered psychological trauma from the content they're asked to review. In a 2019 interview, Wang said the company's contract workers earn "good' pay — "in the 60th to 70th percentile of wages in their geography.' Scale AI spokesperson Joe Osborne noted that the U.S. Department of Labor recently dropped an investigation into the company's compliance with fair labor regulations. Its business has evolved. More tech firms have begun to experiment with using synthetic, AI-generated data to train AI systems, potentially reducing the need for some of the services Scale AI historically provided. However, the leading AI labs are also struggling to get enough high-quality training data to build more advanced AI systems that are capable of fielding complex tasks as well as, or better than, humans. To meet that need, Scale AI has increasingly turned to better-paid contractors with graduate degrees to improve AI systems. These experts participate in a process known as reinforcement learning, which rewards a system for correct answers and punishes it for incorrect responses. The experts who work with Scale AI are tasked with constructing tricky problems — tests, essentially — for the models to solve, according to a person familiar with the matter who asked not to be named because the information is private. As of early 2025, 12% of the company's pool of contributors who work on the process of improving these models had a doctorate in fields such as molecular biology and more than 40% had a master's degree, law degree or MBA in their field, the person said. Much of this process is aimed at companies that want to use AI for medical and legal applications, the person said. One area of focus, for example, is getting AI models to better answer questions regarding tax law, which can differ greatly from country to country and even state to state. Bets like those are driving significant growth for the company. Scale AI generated about $870 million in revenue in 2024 and expects $2 billion in revenue this year. Scale AI has seen demand for its network of experts increase in the wake of DeepSeek, the person familiar with the matter said, as more companies invest in models that mimic human reasoning and carry out more complicated tasks. Scale AI has also deepened its relationship with the U.S. government through defense deals. Wang, a China hawk, has cozied up to lawmakers on the hill who are concerned about China's ascendance in AI. And Michael Kratsios, a former executive at Scale AI, is now one of U.S. President Donald Trump's top tech aides, helping to steer U.S. policy on AI. For Meta, partnering more deeply with Scale AI may simultaneously help it keep pace with AI rivals such as Google and OpenAI, and also help it build deeper ties with the U.S. government at a time when it's pushing more into defense tech. For Scale AI, a tie-up with Meta offers a powerful and deep-pocketed ally. It would also be a fitting full-circle moment for Wang. Shortly after launching Scale AI, Wang said he was asked by one venture capitalist when he knew he wanted to build a startup. In response, Wang said he "rattled off some silly answer about being inspired by The Social Network,' the film about the founding of Facebook.
Japan Times
2 hours ago
- Japan Times
Japan confirms GDP contraction, backing BOJ's cautious stance
Japan's economy contracted in the first quarter, a revised estimate confirmed Monday, weakness that supports the Bank of Japan's cautious stance and keeps political pressure on Prime Minister Shigeru Ishiba ahead of a key election. Gross domestic product (GDP) shrank at an annualized pace of 0.2% in the three months through March, according to the Cabinet Office, a less severe drop than the initial estimate of a 0.7% decline. Economists had expected that initial figure to stand. The improvement was driven by better-than-expected inventory and consumption figures. Inventories contributed 0.6 percentage points to growth, double the preliminary estimate, while personal consumption managed to eke out growth of 0.1%, versus a prior flat reading. The inventory gain is an indication of greater output, but also points to unsold goods and components, a potential sign of weak demand. Business spending gained 1.1%, a little weaker than first forecasts, while net exports, the main factor pushing the figures into the red, posted a drag of 0.8 percentage points. The revised data confirms Japan's economy shrank even before U.S. President Donald Trump amped up tariff pressure in April, deepening uncertainty for policymakers. The BOJ, which slashed its growth forecast for this year at its last policy meeting, is widely expected to maintain its wait-and-see stance when it next meets on June 17. "Looking at the GDP results alone, it's hard for the BOJ to justify a rate hike,' said Kazutaka Maeda, economist at Meiji Yasuda Research Institute. "The bank doesn't need a rate cut, but it needs to wait and see how things unfold. Overall, today's data is more of a factor that pushes back the rate hike timing.' BOJ officials remain on alert over the tariff impact, with Gov. Kazuo Ueda calling uncertainties "extremely high.' He warned last week that tariffs could affect Japan's economy through multiple channels, pledging to evaluate economic and price developments through a broad array of indicators. Most economists expect the central bank to delay further rate hikes, with a majority anticipating no change in coming months. Japan is contending with a barrage of U.S. tariffs, including a blanket 10% duty on its goods that will rise to 24% in early July barring a trade deal. Sector-specific levies are proving especially burdensome, most notably the 25% duties on automobiles and auto parts, which are eroding exporters' profit margins. Japan's exports fell in the first 20 days of May as the Trump administration's sweeping tariffs continued to disrupt trade. Meanwhile, domestic demand remains fragile, offering limited support for the economy. Private consumption growth in the first quarter remained weak, as sustained inflation continued to weigh on household confidence. The nation's key inflation gauge has been at or above 3% since December, driven by surging food and energy prices. With consumption accounting for about 60% of the country's GDP, its weakness is a serious concern for policymakers seeking to achieve a virtuous economic growth cycle. With the economy lacking clear growth drivers, many economists expect a tepid performance in the second quarter, raising the risk of the economy entering a technical recession. The fragile domestic economy and precarious trade diplomacy pose a major challenge for Ishiba, who faces a key Upper House election next month. Ishiba's approval rating remains under pressure in local polls, hitting the lowest level of his premiership last month before recovering slightly this month. To alleviate public frustration over rising prices, Ishiba recently introduced relief measures for households that included the resumption of utility subsidies and the release of government rice stockpiles into the retail market. "Behind weak consumer spending is people's sense that prices are too high,' said Meiji Yasuda's Maeda. "Compared to opposition parties the government's policies are lacking impact, so there's a risk that people get the impression they're not doing anything.' At the same time, Ishiba's government is engaged in negotiations with Washington as several critical deadlines approach in July, including Japan's vote and the expiration of a 90-day grace period that temporarily reduced Trump's so-called reciprocal tariffs. Japan, which was quick to initiate talks, now appears to be lagging behind other nations, as the U.S. has already reached an agreement with the United Kingdom and a temporary truce with China. Japan's lead trade negotiator Ryosei Akazawa said that progress is being made but Japan and the U.S. haven't been able to come to an agreement, following his fifth round of talks with U.S. counterparts. Trump and Ishiba are expected to hold talks on the sidelines of the Group of Seven summit gathering later this month.
Yomiuri Shimbun
2 hours ago
- Yomiuri Shimbun
Japan's Nikkei Stock Average Jumps as Chip Stocks Rally Ahead of Sino-US Talks
Yomiuri Shimbun file photo The Tokyo Stock Exchange TOKYO, June 9 (Reuters) – Japan's Nikkei share average advanced 1% on Monday ahead of trade talks between the U.S. and China in London later in the day, with investors watching for any easing of restrictions over semiconductor shipments. Both countries are under pressure to relieve tensions, with China dominating global exports of rare earth minerals needed for chips and other advanced technologies, while the U.S. has curtailed exports of chip-design software to China. A phone call between U.S. President Donald Trump and Chinese counterpart Xi Jinping on Thursday led to the Monday talks, with Trump later saying rare earth supply would no longer be a problem for the United States. The Nikkei .N225 rose 1.05% to 38,137.09 as of the midday trading recess. The broader Topix .TOPX rose 0.63%. A sub-index of growth shares .TOPXG rallied 0.8%, outpacing a 0.47% rise in value shares .TOPXV. Chip-testing equipment maker and Nvidia supplier Advantest 6857.T was Nikkei's biggest gainer in index-point terms with a 5.17% climb. 'The trade talks in London are at the very least a step in the direction of easing restrictions on chip shipments between the U.S. and China,' buoying the sector on Monday, said Yunosuke Ikeda, chief macro strategist at Nomura. Artificial intelligence-focused startup investor SoftBank Group 9984.T jumped 4.03%. Chip-sector stocks Disco 6146.T and Lasertec 6920.T rose about 3% each. Otsuka Holdings 4578.T, the Nikkei's biggest percentage gainer, soared 8.65% after the drugmaker said its experimental therapy for a potentially life-threatening kidney disease more than halved severe levels of protein in the urine of patients. On the other end, iSpace 9348.T was poised to fall by the daily limit for the second straight session after its second failed attempt to put a lunar lander on the moon last week. The stock was set to slide 20%, with offers to sell outnumbering bids by 9-to-1.
