Shares in software giant Microsoft jumped on Wednesday after the release of fourth quarter earnings underpinned by growth in cloud computer and artificial intelligence applications. Microsoft is a major investor in the generative AI giant and ChatGPT creator OpenAI.
The tech giant saw Intelligent its Cloud segment revenue, which included for the first time revenue in dollar terms from Microsoft’s Azure business, or its public cloud computing platform, come to $29.87 billion, up 22 percent from the $23.78 billion the company posted in the year-earlier period. Previously, Microsoft reported growth in its Intelligent Cloud business only in percentage terms.
Azure markets computing power and other services and faces stiff competition from market leader Amazon Web Services. Shares in Microsoft jumped by $37.76, or 7.3 percent, to $551 in after-hour trading on Wednesday.
Microsoft CEO Satya Nadella in a post-market analyst call said cloud computing and AI represented key growth drivers for his company. “We are building the most comprehensive suite of AI products and tech stack at a massive scale,” Nadella said in prepared remarks.
“Every Azure region is now AI first,” he added of giant data centers Microsoft is building to meet increased demand companies and consumers for AI services. That’s as investors look for a return from the software giant on heavy and continuing investments in AI products and data centers.
“We are going through a generational tech shift with AI and I have never been more confident in Microsoft’s opportunity to drive long term growth and define what the future looks like with that,” Nadella argued.
The Microsoft boss also talked up his company’s gaming business, which has 500 million monthly active users across platforms and devices. “We are now the top publisher on both Xbox and Playstation,” he told analysts.
Overall Microsoft revenue was up 18 percent to $76.4 billion, which beat a Bloomberg analyst consensus estimate of $73.89 billion. And net income rose 24 percent to $27.2 billion.