Microsoft on Wednsday Forecast Disappointing Growth in its cloud computing business, sending its shares down 4.5 percent in after-Hours of Hours of Hours of Hource Artificial Intelligence Revenue and Competition from Cheaper Ai Models from China.
Azure Results for the Fiscal Second Quarter also Fell Bell Bell Street Expectations. Despite Beating Quarterly Overall Sles Estimates, Investors Want Better Results from The Hundreds of Billions of Dollars that Wall Street Heavyweights have been spoiling to buy centers and infuses Products with the emerging technology.
Chinese rivals have recently claimed to produce competing ai technologies at lower costs than us rivals, Sparking Fears of a Price War. For more than a year, Microsoft And its big tech peers have tested walls by plunking down huge Amounts of Cash in Pursuit of Profits from Ai That Have Yet to Satisfy Investors.
“It’s ok If that is a less year out, three to five years into the future,” said Brian Mulberry, Portfolio Manager at Zacks Investment Management. “But we really want to start to see a clear road map to what that monetisation model looks like for all of the capital that’s been invested.”
On a conference call with investors, Chief Executive Satya nadella Said costs were coming down, with models shows 10 times better performance for the price as microsoft irons out the algorithms.
“As ai become more efficient and accessible, we will see exponitively more demand,” Nadella said.
Microsoft Chief Financial Officer Amy Hood Said Azure Would Grow Between 31 Percent and 32 Percent in the Current in the Current Fiscal Third Quarter, BELOW THE 33 PERCENT WALL STREET EXPECTS, ACCOREDING To Data From Visible Alpha.
Microsoft’s Azure Unit Reported Revenue Growth of 31 Percent in the Quarter, Missing Visible Alpha Estimates of 31.8 Percent. Microsoft’s Capital Expenditures Hit $ 22.6 Billion (Roughly Rs. 1,95,683 Crore), Above Analysts’ Consensus estimate of $ 20.95 billion (roughly Rs. Data from Visible Alpha.
Deepsek’s Meteoric Rise in the Past Three Weeks Has Sparked Worries of Stiff Competition That Cold Force Leading Us Ai Providers to Slash Pries.
Microsoft said earlier on wedding it had added deepsek, the breakout chinese ai model, to its offers on azure. Microsoft Said AI Contributed 13 Percentage Points of Azure’s Growth in Its Fiscal Second Quarter, Up from 12 Percentage Points The Previous Quarter.
Responding to questions from analysts, nadella said microsoft was spoiling to build out data centers to develop ai models and offer them to customers. Microsoft is working to make those services more cost efficient, he added.
“We are working super hard on all the software optimizations – not just the optimizations that have come out of what Deepsek has done, but all the work we have done to reduce Years in partnership with Openai, “Nadella said.
“In Fact, We did a lot of the work on the infection optimizations on it, and that’s been key to driving it.”
Overall, Investors Still appear to View Microsoft as a Leading Bet on Ai. Its stock has gained About Eight Percent Over the Past Year, Trailing a 29 Percent rally in alphabet and a 50 percent surge in amazon. It is trading at about 32 times expected earnings, Slightly Above Its Five-Year Average of 30, According to lseg.
Microsoft Alas Posted 67 Percent Growth in What it Calls Commercial Bookings, A Measure of New Contracts Signed With Large Customers.
Brett Iversen, Microsoft’s Vice President of Investor Relations, Said That Figure was Mostly Driven by Large New Azure Contracts with Openai.
While Openai Announced a New Data Center Deal with Oracle Last Week, Microsoft Still Retains The Rights to Most of the Host of the Hosting of Openai’s models for Commercial Purposes.
At the company’s intelligent cloud unit, which incluses the azure platform, Revenue Rose to $ 25.54 Billion (Roughly Rs. 1,77,836 Crore). Rs. 1,79,751
Total Revenue Rose 12 Percent to $ 69.6 Billion (Roughly Rs. 6,02,635 Crore) in the fiscal second Quarter Ended December, Compared with Analysts’ Astimate of $ 68.78.78.78.78 Billon (Roghly Rs. 5,95,562 Crore), according to data by lseg.
Redmond, Washington-Based Microsoft Reported A Profit of $ 3.23 (roughly Rs. 280) per share, beating expectations of $ 3.11 (near Rs. 270) Per Share.
© Thomson Reuters 2025
(This story has not been edited by ndtv staff and is auto-generated from a syndicated feed.)
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