Microsoft’s profits increased by 33% due to investments in AI and cloud computing
Microsoft Corporation has announced a 33% increase in profits for October-December due to significant investments in artificial intelligence technologies, writes AP News. The company reported a net profit of $21.87 billion, or $2.93 per share, which exceeded Wall Street expectations. This increase is largely due to the growth of the cloud computing division, which is the main focus of Microsoft’s investment in artificial intelligence. Revenue for the quarter reached $62.02 billion, up 18% year-on-year, and also exceeded expectations.
The integration of artificial intelligence technology positions Microsoft as a leader in the AI sector, potentially expanding its share in digital advertising. The October 13 acquisition of video game maker Activision Blizzard for $69 billion boosted Microsoft’s revenue, though it also affected operating profit due to acquisition accounting adjustments and integration costs.
Microsoft’s cloud business segment increased revenue by 20%, while Office and LinkedIn grew by 13%. The personal computing business, including video games and Xbox services, grew by 19%, largely driven by Activision’s acquisition of Blizzard. Despite initial investor concerns about Microsoft’s aggressive investment plans, the company’s shares recovered most of their initial losses in over-the-counter trading.