San Francisco, United States– Microsoft quarterly results beat expectations on Tuesday as the tech giant saw demand for its artificial intelligence services stoke revenue.
The company said sales leaped to $62 billion for the October to December period, up 18 percent year-on-year and above the $61.1 billion projected by analysts.
“We’ve moved from talking about AI to applying AI at scale,” said Satya Nadella, chairman and CEO of Microsoft.
Net profit also beat expectations at $21.9 billion, instead of the $20.71 projected by analysts.
Crucially, revenue for Microsoft’s Azure cloud services jumped by 30 percent in the period, driven by the bigger computing needs that come with the adoption of AI.
Overall, Microsoft’s cloud services sales were up by 24 percent, the company said.
“By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector,” Nadella said.
The AI revolution has propelled Microsoft past Apple as the world’s biggest company by market capitalization at more than three trillion dollars in value .
The company’s share price is up a staggering 70 percent from a year ago.
The wind in its sails comes from Wall Street’s belief that Microsoft will benefit from the leap forward in AI, and the results on Tuesday were the biggest piece of evidence yet.
Through its $13 billion partnership with ChatGPT-maker OpenAI, Microsoft has rolled out generative AI capabilities across its product line, with its Azure cloud service delivering the computing power to businesses.
During the quarter, corporate customers were given the option to pony up extra payments for the company’s AI Copilot and other services.
In that period, the company also finalized its blockbuster buyout of “Call of Duty” maker Activision Blizzard, making it the third biggest gaming company in the world.
That closed deal saw Microsoft lay off 1,900 people, or eight percent of staff, from its gaming division.
Layoffs in the October to December period also took place at LinkedIn, the company business friendly social network.
