The value of Microsoft shares last Wednesday, April 30, during extended trading showed an increase of approximately 9%, which is an upward dynamic supported by the fact that this company published the financial results of its operations for the last fiscal quarter, which exceeded preliminary expectations, including regarding the performance of the Azure cloud business, and issued unexpectedly strong guidance.
The revenue of the mentioned technology giant, based in Redmond, Washington, for the third fiscal quarter ended March 31, 2025, was recorded at the $70.1 billion mark. This figure increased by 13% compared to the reading a year ago. At the same time, analysts surveyed by LSEG predicted that Microsoft’s revenue for the mentioned period would reach $68.42 billion dollars.
Earnings per share amounted to $3.46. At the same time, analysts surveyed by LSEG predicted that this figure would reach $3.22.
The company’s net income for the fiscal quarter ended March 31, 2025 was recorded at the $25.8 billion mark. This indicator demonstrated an increase of 18% year-on-year.
Microsoft’s operating income for the mentioned period also showed an upward dynamic. The corresponding figure was recorded at the $32 billion mark. In this case, the increase in reading was 16% year-on-year.
The technology giant predicts that its revenue in the current fiscal quarter will range from $73.15 billion to $74.25 billion. At the same time, the consensus forecast of analysts surveyed by LSEG predicts that the mentioned figure for the specified period will reach $72.26 billion. The technology giant also expects that the revenue of its Azure unit, which sells computing power and other services, for the current fiscal quarter will show an increase of 34%-35% at constant currency. At the same time, StreetAccount predicts that the mentioned indicator will rise by 31.5%.
The company’s management also confirmed that capital expenditures will grow in the new fiscal year. At the same time, it is worth noting separately that the increase in the mentioned indicator is expected at a pace that is less intense compared to the indicators observed in fiscal year 2025.
The technology giant’s implied operating margin in the fiscal quarter ended March 31, 2025, was recorded at the 43.35% mark. At the same time, StreetAccount forecasted that this figure would be 43.5%.
Earnings and revenue of the technology giant for the last fiscal quarter topped preliminary estimates, but at the same time, these figures can be described as backward-looking. The mentioned results do not reflect the sweeping tariffs that in April the President of the United States, Donald Trump, imposed on almost all countries of the world. At the same time, the technology giant issued an optimistic forecast regarding its future activities. These expectations have become a kind of calm factor for investors. Their concerns and worries about Microsoft’s business prospects in a macroeconomic environment characterized by a high level of uncertainty in the context of trade tensions amid rising tariffs from Washington and retaliatory measures from some world capitals have not disappeared, but they have nevertheless weakened. Currently, there is a circulating disturbing vision of the dynamic of operations of technology companies before the end of the present year within the framework of the conditions and circumstances that determine the content of the current configuration of global economic reality.
Microsoft chief executive officer Satya Nadella has already stated that the technology giant plans to spend $80 billion on building data centers that can handle artificial intelligence workloads. It is worth clarifying that in this case, plans for fiscal 2025 are implied. In the context of the mentioned intentions of the technology giant, an important circumstance is that the implementation of the data center construction process requires significant imports from overseas. This means that the costs may increase depending on what the final version of the tariff terms will be.
During the last fiscal quarter, the technology giant continued to actively invest in artificial intelligence infrastructure. Capital expenditures for the mentioned period reached $16.75 billion. This indicator showed an increase of almost 53% year-on-year. It is worth clarifying that the specified reading does not take into account finance leases. Analysts surveyed by Visible Alpha predicted that the technology giant’s capital expenditures for the third fiscal quarter would reach $16.37 billion.
Azure revenue for the mentioned period showed an increase of 33% year-on-year. It is worth noting that 16% of this growth is due to artificial intelligence. Analysts surveyed by StreetAccount predicted that Azure revenue would increase by 30.3%, while experts polled by the media expected this figure to rise by 29.7%.
In January, the technology giant flagged disappointing non-AI Azure cloud execution with clients it engages alongside partners. During this quarter, the company recorded certain improvements in the context of appropriate efforts. The corresponding statement was made by Amy Hood, Microsoft’s finance chief, on a conference call with analysts. According to her, things were a little better. She also noted that the technology giant still has some work to do in its scale of motions and is encouraged by its progress.
Moreover, Amy Hood stated that in artificial intelligence, Microsoft brought infrastructure capacity online faster than expected. According to her, demand is growing a little faster. She also stated that the company expects that beyond June it will have some artificial intelligence capacity constraints.
Microsoft’s Intelligent Cloud unit generated revenue of $26.8 billion for the fiscal quarter ended March 31, 2025. This indicator increased by 21% year-on-year. At the same time, StreetAccount forecasted that the mentioned unit’s revenue would reach $26.16 billion. It is worth noting that Microsoft’s Intelligent Cloud structure includes Azure.
The technology giant said that more than 15 million people are currently using its GitHub Copilot assistant. This figure is four times higher than the reading recorded last year. The relevant information was provided by Satya Nadella on Wednesday’s call.
Microsoft’s activity segment, Productivity and Business Processes generated revenue of $29.9 billion in the fiscal quarter that ended March 31, 2025. This indicator showed an increase of 10% year-on-year. StreetAccount’s forecast predicted that the mentioned segment of the technology giant’s activity would generate revenue of $29.57 billion. It is worth clarifying that the specified business includes Office software subscriptions and LinkedIn. Amy Hood stated that weakness in the hiring market continues to be an impact factor on LinkedIn’s Talent Solutions offering for recruiters.
Microsoft’s More Personal Computing unit generated revenue of $13.4 billion for the fiscal quarter ended March 31, 2025. This indicator increased by 6% year-on-year. StreetAccount forecast provided that the revenue of the mentioned business would reach $12.66 billion. The company’s specified unit includes Windows, search advertising, devices, and video game consoles.
Microsoft reported that sales of devices and of Windows operating licenses to device makers, for the fiscal quarter ended March 31, 2025, showed an increase of 3% year-on-year. Inventory levels remained elevated amid tariff uncertainty. Technology industry researcher Gartner estimated that personal computer shipments grew 4.8% year-on-year for the fiscal quarter ended March 31, 2025.
Satya Nadella stated that the company continues to see increased commercial traction as it approaches the end of support for Windows 10. Support for this operating system, which was introduced in 2015, will end in October. According to Satya Nadella, deployments of the next-generation Windows 11 among commercial customers increased by about 75%.
During the fiscal quarter, which ended on March 31, 2025, Microsoft announced an adjustment to its relationship with OpenAI, the main partner in the area of artificial intelligence. The technology giant said it would have a right of first refusal when the ChatGPT developer wants new computing capacity, but won’t always have to deliver it. It is worth noting that on the same day, OpenAI announced the Stargate AI infrastructure project alongside Oracle and SoftBank at the White House.
The technology giant also published information according to which in the fiscal quarter ended March 31, 2025, it had $623 million in so-called other expenses. This indicator includes recognized losses on equity method investments, including OpenAI. In the previous quarter, the mentioned reading was recorded at the $2.29 billion mark.
The value of the technology giant’s shares fell by 7% for the year. At the same time, the S&P 500 index declined by about 6%.
According to media reports, Microsoft currently has the status of a leader in the commercialization of artificial intelligence products. This is largely because the technology giant cooperates closely with OpenAI. Microsoft, in the context of its activities related to the deployment of artificial intelligence, is not limited to providing computing infrastructure to customers. The technology giant has launched digital assistants powered by machine intelligence in widely used apps such as Office and Excel. In this case, the main goal of leveraging artificial intelligence is to increase productivity.
It is worth noting that there has been increased competition in the machine intelligence industry lately. Obviously, this state of affairs directly concerns Microsoft. At the same time, the technology giant has a strong position that allows it to cope with the mentioned challenge. It is worth noting that leadership in the dynamically developing artificial intelligence industry cannot be guaranteed. AI is currently on a trajectory of intensive technological evolution. Large technology brands, including, in addition to Microsoft, Meta, and Alphabet, for example, are striving to dominate the so-called artificial intelligence race and are making efforts in the appropriate direction. The company, headed by Satya Nadella, has sufficient resources for full-fledged competition. At the same time, leadership requires effort. Microsoft does not deny this.
The company’s efforts to build data centers are related to its striving to meet the demand for artificial intelligence systems training and AI-powered tools. At the same time, as noted by the media, in recent months, the technology giant has slowed down the pace of development in the appropriate direction. So far, there is no definitive understanding as to what this is related to. The mentioned dynamic may be both a sign of financial caution and evidence of declining long-term demand for cloud technologies and artificial intelligence.
On Thursday, May 1, it became known that Microsoft is raising prices for its Xbox games, consoles, and accessories. Xbox will increase some of its first-party game prices from $70 to $80. The Series S 512GB console will cost $380. In this case, an increase of indicator is $80. The more powerful Series X console will cost $600. In this case, a jump in price is $100. The price changes for local retailers will begin immediately.
As we have reported earlier, Microsoft to Contract Out More Software Selling.
