Tech Giants Shine Bright: Microsoft and Apple Lead the Charge
Microsoft’s AI Boom Fuels Growth
Microsoft’s latest quarterly earnings report has sent shockwaves through the tech industry. Despite beating Wall Street’s targets, the company’s stock took a hit in extended trading due to concerns over decelerating growth in its Azure cloud infrastructure unit. However, the software giant’s artificial intelligence business continues to thrive, with an annual revenue run rate of $13 billion, up a staggering 175% year over year.
Earnings and Revenue Soar
Microsoft’s earnings rose 10% to $3.23 a share, while sales increased 12% to $69.6 billion in the December quarter. The company’s Intelligent Cloud business saw revenue increase 19% to $25.5 billion, while its Productivity and Business Processes unit posted a gain of 14% to $29.4 billion. The More Personal Computing unit remained relatively unchanged with sales of $14.7 billion.
Azure Growth Slows, But Remains Strong
Azure revenue grew 31% year over year in constant currency in the December quarter, down from 34% in the September quarter and 35% in the June quarter. Despite this slowdown, Microsoft remains committed to investing in its cloud and AI infrastructure.
Guidance Falls Short
For the current quarter, Microsoft predicted Azure growth of 31% to 32% in constant currency, and expects March-quarter revenue of $68.2 billion, below the consensus estimate of $69.8 billion. Foreign-exchange rates will be a headwind in its fiscal third quarter, according to Chief Financial Officer Amy Hood.
Stock Market Reaction
In after-hours trading, Microsoft stock slid 5% to 420.36, following a 1.1% decline during the regular session to close at 442.33. Despite this, Microsoft stock remains in a 30-week consolidation pattern with a buy point of 468.35, according to IBD MarketSurge charts.
Apple Shines Bright
Meanwhile, Apple stock flashed a buy signal late on earnings, lifting futures and sending the major indexes toward record highs on Thursday. The tech giant’s strong performance has boosted investor confidence, with Deckers and Atlassian also making gains.
Stay Ahead of the Game
Get instant access to exclusive stock lists, expert market analysis, and powerful tools with 2 months of IBD Digital for only $20! Learn how you can make more money with IBD’s investing tools, top-performing stock lists, and educational content.
Leave a Reply