Microsoft’s Q2 Earnings: What to Expect
As Microsoft prepares to release its fiscal second-quarter results, analysts are predicting a significant slowdown in revenue growth. According to forecasts, the tech giant is expected to report an 11% year-over-year increase, its slowest growth since June 2023.
Cloud Services: A Key Area of Focus
Azure cloud growth is expected to slow down in the fiscal second quarter due to a delay from a third-party provider. Despite this, analysts anticipate 31.9% and 31.1% growth from Azure and other cloud services, respectively. This follows a 33% growth in Azure revenue in the fiscal first quarter.
Recent Developments: Windows 365 Cloud Link and GitHub
During the quarter, Microsoft launched the Windows 365 Cloud Link, a PC that allows corporate workers to access applications and files stored in the cloud. Additionally, the company’s GitHub unit announced support for artificial intelligence models from Anthropic and Google for a programming chatbot.
Investing in AI: A Strategic Move
Microsoft invested an additional $750 million into OpenAI during the quarter, demonstrating its commitment to artificial intelligence. However, the company’s absence from a recent White House press conference for the Stargate AI infrastructure project has raised questions.
Global Competition: The Rise of DeepSeek
Meanwhile, Chinese lab DeepSeek has introduced an open-source AI model that is reportedly more efficient than those from major U.S. companies. Microsoft CEO Satya Nadella has acknowledged the threat, stating that the company should take developments from China “very, very seriously.”
Earnings Call: What to Expect
Executives will discuss the quarterly results with analysts and issue guidance on a conference call starting at 5:30 p.m. ET. With Microsoft shares up 6% in 2025, investors will be watching closely for signs of growth and innovation in the AI space.
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