Microsoft Corp. (NASDAQ:MSFT) delivered a better-than-expected quarter on both the top and bottom lines, but investors remain focused on whether the company’s cloud and AI spending story showed enough momentum to reset expectations.
- MSFT stock is down after earnings. See the price action here.
Azure revenue grew 40%, topping consensus estimates of 39.3%, while Microsoft continued to show an improvement in operating margin.
The cloud print was the key line item for investors looking for evidence that demand for AI infrastructure and enterprise cloud services remains durable.
The quarter also showed some moderation in capital spending. Microsoft’s capex slowed to $31.9 billion in the third quarter from $37.5 billion in the second quarter, coming in below the Street’s expectation of $35 billion.
Copilot, Microsoft’s AI assistant, also appears to be trending in the right direction.
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