Microsoft's Azure cloud revenue surges as AI spending pays off
Shares of the software company rose more than 6% in extended trading after it said Azure sales surpassed $75 billion on an annual basis, the first time it has disclosed that figure. That beat expectations for $74.62 billion.
The business still trails market leader Amazon Web Services , which had an earlier start in cloud computing and brought in $107.56 billion in its most recent fiscal year.
The results are likely to bolster investor confidence that Big Tech is benefiting from its massive data center buildout, with capital expenditure to reach $330 billion this year.
Rival Alphabet's earnings also showed last week that AI spending was rising, but so were the returns, as it beat revenue estimates and lifted its outlay forecast by $10 billion.
Microsoft said Azure revenue jumped 39% in the June quarter, more than the analyst average estimate of 34.75%, according to Visible Alpha.
Overall revenue rose 18% to $76.4 billion in the April-June period, Microsoft's fiscal fourth quarter. Analysts on average expected $73.81 billion, according to data compiled by LSEG.
Capital spending rose 27% to $24.2 billion, compared with estimates of $23.08 billion, per Visible Alpha. Microsoft has said the spending is crucial to overcoming supply constraints that have hampered its ability to meet soaring AI demand.
The company has emerged as an early leader in making money from AI thanks to its exclusive access to OpenAI's technology. The tie-up has helped attract scores of businesses to its cloud service and allowed Microsoft to swiftly roll out AI products such as its M365 Copilot AI assistant for enterprises.
It has also turned the company into an investor darling that is $200 billion short of becoming only the second company to hit a $4-trillion valuation, with its shares up about 20% this year.
But investor doubts have risen about the OpenAI tie-up as the companies renegotiate the deal and the startup shifts some workloads to rivals, including Google and Oracle.
Media reports have said that the two are at a deadlock over how much access Microsoft will retain to OpenAI's tech and its stake if OpenAI converts into a public-benefit corporation.
Microsoft has tried to reduce its reliance on OpenAI by developing in-house AI technology and broadening its model lineup with partners such as xAI, Meta, and France's Mistral, hosting their models on Azure for clients.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
an hour ago
- Economic Times
As the July jobs report paints a grim picture, 114 companies plan layoffs in August - is yours on the list?
Full list of companies laying off employees in August 2025: Amidst a slowing job market and rising unemployment, a report indicates that 114 US companies have filed notices for potential layoffs in August 2025. Major firms like Microsoft and Georgia-Pacific are expected to cut hundreds of jobs across various sectors, including tech, retail, and healthcare. Tired of too many ads? Remove Ads US Job Growth Slows as Unemployment Ticks Up to 4.2% 114 Companies File WARN Notices for August Layoffs Tired of too many ads? Remove Ads Layoffs Spread Across Industries: Tech, Retail, Health Care & More Layoff Tracker: All the Companies Letting Go of Workers in August 2025 INEOS ABS USA CAM Industrial Solutions TouchPoint Services (AKA Compass Group) United States Cellular Corporation Lennox Industries Pacific Premier Bank Wellpath Atria Wealth Solutions Corteva Prothena Biosciences Inc. Hood Packaging Corporation Microsoft JC Penney Central Valley Training Center, Inc. Stephens Distributing Company DAI Global, LLC Morgan Truck Body, LLC Reyes Coca-Cola Bottling, LLC L&T Precision, LLC Oerlikon Balzers Coating USA Inc. Georgia-Pacific Sutro Biopharma, Inc. Boston Scientific Corporation Mission Linen Supply CAM Industrial Solutions Highgate Hotels CVS Health Corporation ACDI/VOCA Michaels Stores Procurement, Inc. Incyte Diagnostics JP Morgan Chase Leidos Holdings, Inc. Sapango, Inc. (Tre Posti) Vertex Pharmaceuticals Swat Fame, Inc. The Mutual Group Sodexo Del Monte Foods, Inc. Movate, Inc. (The Genesis Project) Discovery Energy (Rehlko) INOAC Exterior Systems, LLC Accelerate360 Distribution, LLC Nuttall Gear, LLC First Student Paramount Global BioNTech Us, Inc. Need It Now Need It Now Delivers, LLC Del Frisco's Double Eagle Steakhouse Pixelle Specialty Solutions Wells Fargo Harpoon Henry's Seafood Restaurant KIRA Services, LLC KIRA Government Services KIRA Services LLC and KIRA Training Services Southeast Service Corporation (Services For Education) Robert Kaufman, Inc. Ranstad US TEKsystems Seviroli Foods Tyson Foods HyPro, Inc. Transit Management of Volusia County, Inc. Stingray Pressure Pumping Gilead Sciences Target TransAxle, LLC Nordstrom Albertson's Baton Rouge Randalls Store ADRA International Lightspeed Logistics Miami, LLC Advanced Drainage Systems, Inc. Encino Energy, LLC JC Penney (Maryland) Milwaukee Forge, LLC Planned Parenthood Mar Monte, Inc. Amazon Fresh McDonald's Restaurants of California, Inc. Khoros, LLC Oxford Social Club Mucci Tehachapi, Inc. Nasco Education, LLC Social Distribution, LLC Walmart BLST Operating Company, LLC LPL Financial, LLC CRST Expedited, Inc. Whitsons Food Service, LLC Milgard Manufacturing, LLC Columbus Regional Health Joe's Crab Shack Goldman Sachs and Co., LLC Prineville Facility Design Group Americas and Red Lion, LLC Pocino Foods Company IG Design Group Americas, Inc. Bowhead Missions Solutions, LLC International Business Machines-Coppell Accenture Rogue Valley Transportation District Activision Blizzard Science Systems and Applications Management and Training Corporation Pourlessoins (Synergy Health Services and Zomleben) Northwest Offset Printing, Inc. Santa Maria Hostel TT Electronics Facility IRC (Plano) Ford Design Studio NYP Holdings, Inc. Sonoco Products DHL OTG Management - Terminal 8 U.S. Cotton, LLC Are Tariffs Fueling a US Job Market Recession? Tired of too many ads? Remove Ads August Layoffs Up from July, But Below June's Peak FAQs The summer is turning colder for many American workers. As the July jobs report shows slowing growth and rising unemployment,have filed notices to lay off employees in August 2025, potentially affecting thousands across the country, as per a latest numbers from the Bureau of Labor Statistics show job growth totaling justin July, falling well short of economists' expectations and underscoring growing concerns about the health of the US labor market as US president Donald Trump ramps up tariffs, as reported by CNBC. To make matters worse, the unemployment rate ticked up to 4.2%, a figure in line with forecasts but worrying given that previous months' job totals were also revised downward by a combined 258,000, as per the CNBC READ: Trump's name reportedly redacted from Epstein files — here's what the FBI doesn't want you to see Meanwhile, which monitors Worker Adjustment and Retraining Notification Act filings, found that a total of 114 companies have notified of the potential upcoming layoffs in August, as reported by some are minor, involving just a few employees, but others are far more severe, with companies like Microsoft, Georgia-Pacific, and Pixelle Specialty Solutions each expected to lay off between 501 and 1,000 workers, according to the READ: Atlassian boss Mike Cannon-Brookes axes 150 jobs via AI, then defends his private jet in brutal video message The layoffs span nearly every major sector of the economy, from software and pharmaceuticals to retail, food, health care, and logistics, as per the Newsweek report. Whether you're working at a hospital or a high-tech firm, no industry seems immune. Employees at big names like Microsoft, Wells Fargo, CVS Health, Target, Nordstrom, JP Morgan Chase, Amazon Fresh, Walmart, and McDonald's could be among those affected, according to the Newsweek is the full list, which is based on WARN notices, provided by READ: Microsoft lays off thousands, makes $27 billion profit in Q2 — CEO Satya Nadella doubles down on AI mania While layoffs are rising, experts caution against linking them solely to a struggling economy, as per Newsweek. Some companies may be reducing staff to boost profits or adapt to shifting demand, according to the report. But larger macroeconomic forces are clearly at play, including global tariffs and domestic policy changes, as per the Newsweek Alpert, executive chairman of Westland Capital LLC, told Newsweek that the "jury's still out" regarding the impact of tariffs on American employers and workers/consumers, and highlighted that as soon as there is a substantial impact on unit sales, a recession will essentially be in effect, as reported by explained that, "Conversely, in intermediate goods, when you have price rises in primary inputs that affect the ability of domestic manufacturers to manufacture without losing money, you're going to have layoffs and there's your recession. So, it really depends on what this all comes out to be in the end," as quoted by said that, "My general overall answer is what [Trump] wants to do, he can't do without tanking the economy. Can he do something less than what he is fulminating about? Yeah, there are things he can do to fine-tune the system that could even be beneficial. But that's not what's coming out of his mouth, or his pen, at the moment," as quoted in the you're concerned about job security this month, it's worth checking whether your employer is on the WARN list. Layoffs are expected to increase from July's 95 employers to 114 in August, even if the number remains lower than June's 160, as per the Newsweek range of layoffs varies, some companies are cutting just a handful of jobs, while others are slashing hundreds, according to the report. Some of the businesses affected include food distributors, healthcare providers, banks, tech firms, manufacturers, and logistics companies, according to the Newsweek the US continues navigating uncertain economic condition, with tariffs, inflation, and consumer behavior all in flux, the job market may remain unpredictable in the months ahead, as per Newsweek.A mix of rising costs, global tariffs, and shifting strategies is prompting companies to reduce staff, as per the Newsweek employers are required to file notices ahead of mass layoffs.
India.com
2 hours ago
- India.com
Days after massive layoffs, Satya Nadella's Microsoft hits jackpot, earns 6541882500000 in…, profit beats…
Microsoft announced on Wednesday that annual revenue for its flagship cloud platform, Azure, surged 34% to $75 billion. The Azure business remains at the core of Microsoft's strategic pivot towards artificial intelligence, playing a key role in driving its AI-focused growth. Microsoft Q1 Results The software giant said its fiscal fourth-quarter profit was $34.3 billion, or $3.65 per share, beating analyst expectations for $3.37 per share. It posted revenue of $76.4 billion in the April-June period, up 18 per cent from last year. Analysts polled by FactSet Research had been looking for revenue of $73.86 billion. Microsoft's Massive Layoffs Microsoft CEO Satya Nadella told employees last week the layoffs were 'weighing heavily' on him but also positioned them as an opportunity to reimagine the company's mission for an AI era. Promises of a leaner approach have been welcomed on Wall Street, especially as Microsoft and other tech giants are trying to justify huge amounts of capital spending to pay for the data centres, chips and other components required to power AI technology. Google said after releasing its earnings last week, it would raise its budget for capital expenditures by an additional $10 billion to $85 billion. Microsoft is expected to outline similar guidance soon. (With Inputs From Agencies)
&w=3840&q=100)
Business Standard
2 hours ago
- Business Standard
Amazon tumbles after cloud computing growth disappoints investors
shares fell 7 per cent on Friday as the tech giant's results fanned investor fears its cloud unit was falling behind Microsoft and Alphabet in the artificial intelligence race. Amazon Web Services, long the cloud-computing market leader, edged past Wall Street estimates for June-quarter revenue on Thursday with a 17.5 per cent increase, but it widely lagged the 39 per cent growth seen at Microsoft Azure and Google Cloud's 32 per cent gain. That disappointing growth came even as Amazon shelled out $31.4 billion in capital expenditure, more than rivals, and suggested it would spend a more-than-estimated $118 billion for the year. Google and Microsoft also pledged higher spending, but were rewarded from investors on signs AI was already becoming a major growth driver across their businesses, justifying the bill. The companies have been spending billions of dollars on datacenters and cutting-edge chips that they say are necessary to overcome supply constraints hampering their efforts to capitalize on soaring demand for AI services. "The spotlight was firmly on AWS and it didn't quite shine as brightly as expected," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. "While Microsoft and Alphabet have already shown strong momentum in cloud growth, AWS wasn't the knockout many wanted to see." Growing expenses have also started to take a bite out of AWS's margins, the business that has long been Amazon's profit engine, accounting for about 60 per cent of its operating income. AWS margins contracted to 32.9 per cent during the quarter, their lowest level since the final quarter of 2023, and Amazon also issued a current-quarter total operating income forecast that was lower than market estimates. CEO Andy Jassy told analysts on a post-earnings call that it was still "very early days" in the AI race and that Amazon's massive cloud business, much larger than rivals, was primed to perform well once the AI capacity constraints start to ease. The stock, now down 1.5 per cent for the year, was at $216.2 in late morning trading. The drop was set to erase around $170 billion from Amazon's market value, if the losses hold. The company still trades at a relatively high premium, with a 12-month forward price-to-earnings ratio of 33.87, compared with Microsoft's 34.19 and Alphabet's 18.64, according to data compiled by LSEG. RETAIL RESILIENCE At least 30 analysts raised their price targets on the stock, while three lowered, giving it a median view of $260. Some of that analyst confidence comes from the strong performance of Amazon's retail business, which has remained resilient in the face of Trump administration tariffs that have hobbled many retailers and their supply chains. Amazon has yet to see a drop in demand or a notable rise in prices in the first half of the year, Jassy said, as its online store sales jumped a better-than-expected 11 per cent in the second quarter. Manufacturers and suppliers have shouldered most of the tariff impact so far, analysts said, but noted that much of the inventory Amazon sold in the quarter arrived in the preceding three-month period. "If Amazon's retail business was a standalone entity, it would be trading dramatically higher following the near-perfect results," said Michael Morton, analyst at MoffettNathanson. "Unfortunately, as we all know, the success of the retail business is not what's going to matter in the near term for Amazon's stock price."
