Microsoft is expected to show revenue growth for the quarter of about 15% in its earnings report after the close on Tuesday.During the quarter, Microsoft started selling Surface PCs that can handle artificial intelligence workloads locally.Microsoft is expected to show revenue growth of about 15% from $56.2 billion a year earlier, following expansion of 17% in theMicrosoft is likely to find its strongest growth in cloud computing.
Analysts at Evercore ISI, who have a buy rating on Microsoft shares, wrote in a note last week that they expect 7.8 points of Azure's growth to come from artificial intelligence services, up from 7 points in the fiscal third quarter. An improvement in the PC market might provide some relief to the Windows operating system business, which contracted last year after a Covid-era computer buying spree. Technology industry researcher Gartner estimated that PC shipments grew 1.9% in the fiscal fourth quarter, up from 0.9% growth in the prior period.with AI features that can run certain models locally without the need for an internet connection. Dell, HP and other device makers also touted their own so-called Copilot+ PCs.
Microsoft shares have gained about 14% year to date, slightly underperforming the S&P 500 index, which is up about 15%. Executives will discuss the results and issue guidance on a conference call with analysts starting at 5:30 p.m. ET.Tom Lee says the rotation out of large caps is just beginning, small caps to surge 15% in August
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