Microsoft reported quarterly results that impressed investors and showed how resilient the company is despite making significant investments in AI.
Some investors are concerned about the company’s aggressive investment in AI, while others are demanding it. During the quarter, Microsoft reported spending $20 billion on capital expenditures. This is almost double what we spent in the same period last year.
However, it became clear that the company still performed well in the short term, even among long-term investments, which satisfied both groups of investors. In the July-September fiscal quarter, overall sales rose 16% year over year to $65.6 billion. Despite all this AI investment, profits also increased by 11%.
This growth was primarily driven by Azure and cloud services, which increased revenue by 33%. The company attributes 12% of this to AI-related products and services.
Meanwhile, Microsoft’s gaming division continues to challenge long-held assumptions that hardware is king, with Xbox content and services revenue up 61% year over year even as hardware sales fell 29%. was recorded.
Microsoft is slowly moving away from its classic strategy of making software and services exclusive to its own hardware, launching first-party games like Sea of Thieves not only on PC but also on Sony’s competing PlayStation 5 console. It is famous that Compared to Xbox, PlayStation dominates this generation in terms of sales and installed base.
However, it would be a mistake to think that the 61% increase in content and services revenue was simply due to the popularity of Microsoft’s Game Pass subscription service. The company attributed 53 points of that to its recent $69 billion acquisition of Activision.
