In fact, the words"artificial intelligence" were mentioned 50 times during Microsoft's earnings call.
"We'll manage the profit and loss carefully driving operating leverage in a disciplined way but not being shy of investing where we need to invest in order to grab the long-term opportunity [in artificial intelligence]," Nadella said on the earnings call.The solid report spurred analysts to boost their growth outlooks for Microsoft. Here's what they are saying.Raised to $340 from $320,"Buy" rating.
"Q4 outlook suggests Azure visibility perhaps improving. The durability of Office 365 commercial growth is impressive, holding at 18% year-over-year constant currency growth... Early traction in AI is encouraging. AI/Machine Learning workloads added 1% of Azure growth in Q4 and thousands of paid customers are already running AI-powered Teams since launching two months ago... We view Microsoft as a top pick," BofA said.Raised to $325 from $315,"Outperform" rating.
"Nadella and Co. delivered another masterpiece cloud quarter which will be the focus of the Street and sets a positive tone... It's clear that in Redmond's enterprise backyard the company is gaining more market share on the cloud front with many enterprises making this transformational shift on the shoulders of Microsoft... the AI story is still in the first inning of playing out as ChatGPT at Microsoft is leading this tech AI arms race," Wedbush said.
"In our view, Microsoft's very unexpected beat and guide-above demonstrates its continued leadership across the tech stack and the resiliency of the business, even in a challenging environment, coupled with the momentum of generative AI. While short-term stock movements are notoriously difficult to predict, our call has been to own Microsoft shares for category leadership in generative AI, which has the potential to increase the value proposition pervasively across the Microsoft stack.