Latest news with #NoelleWalsh
Yahoo
30-04-2025
- Business
- Yahoo
Microsoft beats Q3 estimates on top and bottom line on strong cloud bookings
Microsoft (MSFT) announced its third quarter earnings after the bell on Wednesday beating expectations on the top and bottom lines on the strength of its cloud performance. The stock was up just over 5% in after hours trade following the announcement. Microsoft stock is down roughly 7% year to date, flat over the past 12 months. For the third quarter, Microsoft saw earnings per share (EPS) of $3.46 on revenue of $70 billion. Wall Street was anticipating EPS of $3.21 on revenue of $68.4 billion, according to Bloomberg consensus estimates. The company reported EPS of $2.94 on revenue of $61.8 billion in the same quarter last year. Microsoft's commercial cloud revenue topped out at $42.4 billion versus an anticipated $42.2 billion, up from $35.1 billion in Q3 2024. The company's Productivity and Business Processes saw revenue of $29.9 billion compared to expectations of $29.6 billion, while Intelligent Cloud and Azure revenue hit $26.8 billion The percentage of Azure revenue attributable to AI hit 16 points. Analysts were expecting 15.6 points. Microsoft's More Personal Computing segment, which includes sales of Windows licenses to third-party computer makers and its gaming and search divisions, brought in 13.4 billion. Wall Street was looking for $12.6 billion. Microsoft's report comes amid fears that President Trump's tariffs could cause an economic slowdown that would hit enterprise cloud and AI spending. The company is also cutting back on some of its AI buildout, with Noelle Walsh, president of Microsoft Cloud Operations and Innovation, writing in a LinkedIn post that the company is "slowing or pausing some early-stage projects." In February, TD Cowen analyst Michael Elias wrote in an investor note that Microsoft was canceling an unspecified number of its data center leases. At the same time, the tech giant has said it's contending with AI capacity constraints that are preventing it from providing as many AI services as its customers need. Microsoft plans to end support for its Windows 10 operating system in October, which analysts say should boost PC sales as consumers and businesses flock to Windows 11-powered systems. Read more: The latest news and updates on Trump's tariffsCorrection: An earlier version of this story erroneously said that Microsoft will report earnings on Thursday. The company reports earnings on Wednesday after the bell. Email Daniel Howley at dhowley@ Follow him on Twitter at @DanielHowley. Sign in to access your portfolio
Yahoo
21-04-2025
- Business
- Yahoo
Analyst unveils surprising Microsoft stock price target after tariff slump
In an environment where recession warnings are growing louder, even Microsoft isn't untouchable. Since late 2022, Microsoft has led the charge in AI infrastructure, thanks to its multibillion-dollar partnership with OpenAI. The race to dominate generative AI sparked a frenzy in data center development, GPU acquisition, and global capacity expansion. But in recent weeks, that expansion has shown signs of slowing. 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰💵 'We may strategically pace our plans,' Microsoft's Head of Cloud Operations Noelle Walsh wrote in a LinkedIn post earlier this month. She said Microsoft had undertaken the 'largest and most ambitious infrastructure scaling project' in its history but would now be 'slowing or pausing some early-stage projects.' In the past six months, Microsoft has pulled back from more than two gigawatts of AI cloud capacity across the U.S. and Europe, analysts at TD Cowen noted. In Ohio, a $1 billion data center was recently shelved. Still, analysts say this is less about abandoning AI and more about shifting from the costly infrastructure buildup toward more selective investments. 'Over the past few quarters, Microsoft has 'overspent' on land and buildings but is now going back to a more normal cadence,' Barclays analyst Raimo Lenschow wrote, according to Business Insider. Microsoft's () stock is down 11.8% year-to-date as of April 17, yet this is the smallest drop among the Magnificent 7 tech giants. By comparison, Nvidia () , and Tesla () have shed 22% and 40%, respectively. Compared to Nvidia, Apple () , and Tesla, Microsoft is less exposed to tariff impact as it doesn't deal much in physical or consumer Microsoft's fiscal year 2024, its cloud segment, which includes Azure, was the company's largest revenue contributor, generating about 43% of the company's total revenue. What's more, Microsoft's focus on enterprise customers means that a big portion of its revenue streams is tied to long-term contracts, giving Microsoft extra stability. Still, Microsoft isn't entirely immune to the pressures. In its latest-reported quarter ended December 2024, Microsoft posted earnings per share of $3.23 on revenue of $69.6 billion, both topping consensus estimates. But growth in Azure, Microsoft's AI-focused cloud platform, came in softer than expected, and the company's revenue outlook for the current quarter fell short of forecasts. Revenue from Azure and related cloud services rose 31% year over year, slightly below the 33% growth reported in the previous quarter. Microsoft expects $67.7 billion to $68.7 billion in fiscal third-quarter revenue compared with the $69.78 billion consensus. The company is set to report earnings for its fiscal third quarter on April 30 after market close. Citi analysts led by Tyler Radke lowered the firm's price target for Microsoft to $480 from $497 while maintaining a buy rating, according to a research note on April 17. The price cut aligned with Citi's view for a broader economic slowdown, with analysts moderating estimates broadly by roughly 3 points across Microsoft's three key the March quarter, Citi projects Azure growth will land at the lower end of its 31% guidance, with potential for further slowdown in the fourth-quarter guidance. More Tech Stocks: Top analyst revisits Tesla stock price target as Q1 earnings loom Google's Waymo is planning a move that's downright creepy Analyst reboots Apple stock price target after tariff meltdown Revenue from Microsoft's Intelligent Cloud, including Azure, accounted for roughly 37% of the company's total revenue in the December quarter. "Despite this incremental caution, the decline post Q2 results provides a more palatable entry point, and we continue to view MSFT as a more defensive asset within large cap tech," the analyst in to access your portfolio
Miami Herald
20-04-2025
- Business
- Miami Herald
Analyst unveils surprising Microsoft stock price target after tariff slump
In an environment where recession warnings are growing louder, even Microsoft isn't untouchable. Since late 2022, Microsoft has led the charge in AI infrastructure, thanks to its multibillion-dollar partnership with OpenAI. The race to dominate generative AI sparked a frenzy in data center development, GPU acquisition, and global capacity expansion. But in recent weeks, that expansion has shown signs of slowing. Don't miss the move: Subscribe to TheStreet's free daily newsletter "We may strategically pace our plans," Microsoft's Head of Cloud Operations Noelle Walsh wrote in a LinkedIn post earlier this month. She said Microsoft had undertaken the "largest and most ambitious infrastructure scaling project" in its history but would now be "slowing or pausing some early-stage projects." In the past six months, Microsoft has pulled back from more than two gigawatts of AI cloud capacity across the U.S. and Europe, analysts at TD Cowen noted. In Ohio, a $1 billion data center was recently shelved. Still, analysts say this is less about abandoning AI and more about shifting from the costly infrastructure buildup toward more selective investments. "Over the past few quarters, Microsoft has 'overspent' on land and buildings but is now going back to a more normal cadence," Barclays analyst Raimo Lenschow wrote, according to Business Insider. Image source: Sokolow/picture alliance via Getty Images Microsoft's (MSFT) stock is down 11.8% year-to-date as of April 17, yet this is the smallest drop among the Magnificent 7 tech giants. By comparison, Nvidia (NVDA) , and Tesla (TSLA) have shed 22% and 40%, respectively. Compared to Nvidia, Apple (AAPL) , and Tesla, Microsoft is less exposed to tariff impact as it doesn't deal much in physical or consumer products. Related: Veteran fund manager resets Nvidia stock price target after shocking export news In Microsoft's fiscal year 2024, its cloud segment, which includes Azure, was the company's largest revenue contributor, generating about 43% of the company's total revenue. What's more, Microsoft's focus on enterprise customers means that a big portion of its revenue streams is tied to long-term contracts, giving Microsoft extra stability. Still, Microsoft isn't entirely immune to the pressures. In its latest-reported quarter ended December 2024, Microsoft posted earnings per share of $3.23 on revenue of $69.6 billion, both topping consensus estimates. But growth in Azure, Microsoft's AI-focused cloud platform, came in softer than expected, and the company's revenue outlook for the current quarter fell short of forecasts. Revenue from Azure and related cloud services rose 31% year over year, slightly below the 33% growth reported in the previous quarter. Microsoft expects $67.7 billion to $68.7 billion in fiscal third-quarter revenue compared with the $69.78 billion consensus. The company is set to report earnings for its fiscal third quarter on April 30 after market close. Citi analysts led by Tyler Radke lowered the firm's price target for Microsoft to $480 from $497 while maintaining a buy rating, according to a research note on April 17. The price cut aligned with Citi's view for a broader economic slowdown, with analysts moderating estimates broadly by roughly 3 points across Microsoft's three key segments. Related: Billionaire Bill Ackman delivers frank 3-word message on tariff war For the March quarter, Citi projects Azure growth will land at the lower end of its 31% guidance, with potential for further slowdown in the fourth-quarter guidance. More Tech Stocks: Top analyst revisits Tesla stock price target as Q1 earnings loomGoogle's Waymo is planning a move that's downright creepyAnalyst reboots Apple stock price target after tariff meltdown Revenue from Microsoft's Intelligent Cloud, including Azure, accounted for roughly 37% of the company's total revenue in the December quarter. "Despite this incremental caution, the decline post Q2 results provides a more palatable entry point, and we continue to view MSFT as a more defensive asset within large cap tech," the analyst wrote. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
CBS News
12-04-2025
- Business
- CBS News
Microsoft says it's 'slowing or pausing' some AI data center projects, including $1B plan for Ohio
Microsoft said it is "slowing or pausing" some of its data center construction, including a $1 billion project in Ohio, the latest sign that the demand for artificial intelligence technology that drove a massive infrastructure expansion might not need quite as many powerful computers as expected. The tech giant confirmed this week that it is halting early-stage projects on rural land it owns in central Ohio's Licking County, outside of Columbus, and will reserve two of the three sites for farmland. "In recent years, demand for our cloud and AI services grew more than we could have ever anticipated and to meet this opportunity, we began executing the largest and most ambitious infrastructure scaling project in our history," said Noelle Walsh, the president of Microsoft's cloud computing operations, in a post on LinkedIn. Walsh said, "Any significant new endeavor at this size and scale requires agility and refinement as we learn and grow with our customers. What this means is that we are slowing or pausing some early-stage projects." Microsoft didn't say on Wednesday what other projects it has slowed outside of Ohio, but in late December, it revealed it was pausing the later phases of a large data center project in Wisconsin. Analysts with TD Cowen reported earlier this year that Microsoft was also scaling back some of its international data center expansion and canceling some leases in the U.S. for use of data centers operated by other companies. Other analysts for months have tied some of the changes to a shift in Microsoft's close relationship with its business partner OpenAI, maker of ChatGPT. "OpenAI was moving in one direction" by prioritizing the development of more advanced AI systems, which require vast computing resources to train on troves of data, while "Microsoft may not have been moving in that same direction," said Craig Ellis, director of research at B. Riley Securities. The two companies announced on Jan. 21 that they were altering the agreement that had made Microsoft the exclusive provider of OpenAI's computing power, enabling the smaller company to build its capacity, "primarily for research and training of models." It was the same day that newly inaugurated President Donald Trump touted OpenAI's partnership with Oracle and SoftBank to pledge $500 billion in new AI infrastructure in the U.S., starting with a data center in Texas. Microsoft has long built data centers around the world to run its cloud computing services. The generative AI boom accelerated the demand for such facilities, both to train new AI systems and to keep them running as millions of people start using chatbots and other AI tools at work and home. The computing it takes to run AI tools is expensive and requires a large amount of electricity, so much so that Trump this week cited AI needs as part of the justification for using his emergency authorities to boost the declining U.S. coal industry, a reliable but polluting energy source. Tech companies have also sought to tap into nuclear power, including a proposed Microsoft-backed revival of the shuttered Three Mile Island plant in Pennsylvania, which would feed an electricity grid supplying data centers in Ohio as well as Virginia, the nation's biggest data center hub. Microsoft said it still plans to spend more than $80 billion globally to expand its AI infrastructure this fiscal year, which ends in June, and has already doubled its data center capacity over the past three years. "While we may strategically pace our plans, we will continue to grow strongly and allocate investments that stay aligned with business priorities and customer demand," Walsh said. The Ohio pause, nevertheless, came as a disappointment to local officials. Licking County has also attracted data center investments from Microsoft rivals Google and Meta Platforms and a highly anticipated semiconductor factory from Intel, though the struggling chipmaker in February pushed back the expected completion date for the project's first stage to 2030.
The Hill
10-04-2025
- Business
- The Hill
Microsoft ‘slowing or pausing' some AI data center projects
Microsoft said on Wednesday it is 'slowing or pausing' some of its data center projects, describing the move as a show of flexibility as the artificial intelligence (AI) industry evolves. 'In recent years, demand for our cloud and AI services grew more than we could have ever anticipated and to meet this opportunity, we began executing the largest and most ambitious infrastructure scaling project in our history,' Noelle Walsh, president of Microsoft cloud computing operations, wrote in a Wednesday post on LinkedIn. 'By nature, any significant new endeavor at this size and scale requires agility and refinement as we learn and grow with our customers. What this means is that we are slowing or pausing some early-stage projects,' she said. The announcement comes as AI companies pour unprecedented amounts into infrastructure to meet the computational and energy demands of the emerging technology. Microsoft is still on track to spend over $80 billion on infrastructure, a company spokesperson confirmed. Still, the company has revealed changes to a variety of its data center plans, including the halt of projects in central Ohio's Licking County. A Microsoft spokesperson told The Hill these projects were halted 'after careful consideration' and that two of the three sites will be used for farming. And last December, the company announced it paused a large data center project in Wisconsin as it entered the later phases. 'We plan our datacenter capacity needs years in advance to ensure we have sufficient infrastructure in the right places,' the spokesperson told The Hill. 'As AI demand continues to grow, and our datacenter presence continues to expand, the changes we have made demonstrates the flexibility of our strategy.' The Trump administration has pushed for more data center development to assist in the acceleration of AI technology. These centers house rows of servers that provide the processing capacity for machine learning, cloud storage and AI systems. Last week, the administration identified 16 sites for data centers on land owned by the Department of Energy, with Secretary Chris Wright describing the 'global race for AI dominance' as the 'next Manhattan project.' The department said it hopes operations at the center could begin by the end of 2027. During his first week at the White House in January, President Trump announced a private sector investment of up to $500 billion to build AI infrastructure.
