Microsoft's cloud business powers growth in quarterly profits

REDMOND

Microsoft has reported a 10 percent increase in quarterly profits as it tries to maintain its position as a leader in artificial intelligence technology.

The software giant said its fiscal fourth-quarter profit was $22 billion, or $2.95 per share, slightly beating analyst expectations for $2.94 per share.

It posted revenue of $64.7 billion in the April-June period, up 15 percent from last year. Analysts polled by FactSet Research had been looking for revenue of $64.4 billion.

Microsoft's growth was led by its cloud computing business, where quarterly revenue rose 19 percent to $28.5 billion. That was still lower than what some analysts expected.

Money brought in from cloud computing has driven blockbuster earnings quarter after quarter, and a hint that stellar growth may be slowing was enough to give investors pause.

Microsoft is among the major contenders in the fierce race to build out artificial intelligence systems, pouring billions of dollars into the technology in the hope it will pay off.

The Redmond, Washington-based company doesn’t report revenue specifically from AI products but says it has infused the technology into all of its business segments, particularly its Azure cloud computing contracts, but increasingly its workplace software and other products.

Much of its generative AI technology has been built as part of its multibillion-dollar investments in OpenAI, maker of ChatGPT.

Revenue from Microsoft's productivity services – such as its Office line of products – rose 11 percent to $20.3 billion.

Microsoft’s personal computing business, centered on licensing its Windows operating system, made $15.9 billion for the quarter, up 14 percent from last year.