Despite the faltering PC market, Microsoft has been riding high on cloud revenues for years, and that seems to be continuing. its intelligent cloud business was up 18 percent from last year, reaching $21.5 billion. Microsoft's belt tightening didn't stop the company from potentially investing $10 billion more in ChatGPT creator OpenAI, yet another sign that AI is going to play a major role in its future projects. The company plans to add ChatGPT to its Azure OpenAI service soon, and it's reportedly planning to integrated that technology in Bing.
Microsoft's More Personal Computing division, which includes Windows, Xbox and PC hardware, fell by 19 percent year-over-year, hitting $14.2 billion. That's the direct result of the PC market downturn. The company says Windows revenue to manufacturers fell by 39 percent, while Xbox content and services was also down by 12 percent. Devices revenue also dropped by 39 percent — it turns out Surface devices weren't in huge demand over the holidays.
"The surprisingly strong performance in Microsoft’s key Azure cloud business was enough to ease worries surrounding a steeper deceleration path on cloud optimizations, sending the stock higher," said Jesse Cohen, senior analyst at Investing.com. "Tech investors are relieved to see that the slowdown across Microsoft’s key cloud business was not as bad as feared."
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