Microsoft set to report earnings after the bell

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While ChatGPT has inspired companies to draw on Microsoft's cloud services for generative artificial intelligence, clients have been cutting cloud costs

MicrosoftAnalysts see Microsoft increasing revenue by about 9% year-over-year in part from greater corporate spending on cloud infrastructure for artificial intelligence. Symptoms of an AI fever appeared after Microsoft-backed OpenAI's ChatGPT chatbot, introduced last year,At the same time, analysts recognize that for the past several quarters, organizations have been trying to reduce the cost of the workloads they already run in Microsoft's Azure cloud, which could hamper growth.

Ahead of the report, analysts polled by CNBC and by StreetAccount were expecting 26% growth for Azure and other cloud services.Analysts have been trying to predict the timing and size of the impact from that offering, which will cost $30 per person per month on top of existing Microsoft 365 subscription costs. Investors be will listening for new details on the topic during Microsoft's earnings call.

Earlier this month Microsoft completed its $68.7 billion acquisition of video-game publisher Activision Blizzard. While Activision won't be incorporated in to Microsoft's fiscal first-quarter results, they will partly impact earnings for the next quarter, so executives will likely discuss it when providing guidance.

Microsoft shares have risen 38% so far this year, while the S&P 500 index is up about 11% over the same period. Executives will discuss the results with analysts and issue guidance on a conference call starting at 5:30 p.m. ET.

 

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