Software
Microsoft Fiscal Q2 Earnings: Accelerating Growth, AI in the Spotlight
Microsoft kicks off Big Tech’s earnings alongside AMD and Alphabet, with AI in the spotlight as the company posted a sizable beat last quarter while seeing “higher-than-expected AI consumption.” Revenue and EPS estimates have inched higher, with the current revenue estimate of $61.1 billion slightly above management’s guide for $60.9 billion, highlighting the optimism the Street has on AI-related tailwinds. Azure and Copilot will be closely watched, as Intelligent Cloud drove $850M of Microsoft’s ~$2 billion beat in fiscal Q1 due to AI tailwinds, while analysts are optimistic on Copilot creating a new stream of revenue over the next few fiscal years. Microsoft has been a big investor in scaling its data center and AI capabilities, and the Street is looking for these investments to bear fruits in Q2. Notably, as stated in our AMD write-up, keep an eye out for a PC super cycle which could occur in H2 2024. Microsoft will be a clear beneficiary of this given Windows is expected to get its most important upgrade in many years (decades?) with many AI features.
Sign in to read the full article
Sign in with your I/O Fund account to check your plan access.
