Microsoft Earnings Preview: Focus Is on AI’s Contribution to Azure Revenue

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Stocks Analysis by Brian Gilmartin covering: Microsoft Corporation. Read Brian Gilmartin's latest article on Investing.com

), the enterprise software giant is scheduled to report their fiscal Q3 ’24 financial results after the bell on Thursday, April 25th, 2024.

Q4 ’23’s current consensus is 7% expected growth in EPS, 10% growth in operating income, and another 15% expected growth in revenue. What was interesting about the December ’23 quarter for Microsoft, was that “cash & equivalents” fell $62 billion, since Microsoft’s acquisition of Activision was an all-cash deal, and it closed in October ’23. Microsoft’s cash position of $81 billion is now where it was in 2013.Looking at the last few quarters for Microsoft, Azure has returned to a 28% run rate, and AI is starting to have an impact on Azure.

While that’s a positive, the ultimate proof is in the numbers for Microsoft, and frankly, it was good to read in fiscal Q1 and Q2 this year, that AI is already making a contribution to Azure. Microsoft’s Intelligent Cloud segment is now 42% of total Microsoft revenue and 48% of total Microsoft income, so Intelligent Cloud is now almost half of Microsoft’s total business, which is pretty amazing since it’s only 14 years old .

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