John Belton, Gabelli Funds portfolio manager and managing director for growth portfolios, reacts to Microsoft's second-quarter earnings on "Bloomberg The Close." ...

Group 1: AI Market Overview - The artificial intelligence (AI) boom continues strong, with 90% of surveyed investors planning to maintain or increase their AI stock investments this year, indicating no signs of fatigue in the market [1] - Experts believe AI will generate trillions of dollars in economic value over the coming decades, prompting major companies to invest hundreds of billions into AI infrastructure [2] Group 2: Key AI Stocks - **Nvidia**: Dominates the GPU chip market for AI data centers with an estimated 92% market share. The company has a $500 billion backlog and has recently entered full production on its new AI chip, Rubin, indicating significant growth potential [4][5] - **Microsoft**: Holds a 27% stake in OpenAI and benefits from double-digit revenue growth across its businesses. The company is well-positioned to leverage AI technology through its software and Azure cloud services, trading at a forward P/E ratio just under 30 [6][7] - **Salesforce**: Despite a nearly 40% decline from its late-2024 high, Salesforce remains a critical software ecosystem for many businesses, operating in sales and marketing [8]

How do you feel, having had a few minutes to take a look at some of these numbers. Yeah, it's still our topic. Investors may have expected 39 to 40% growth or larger.They got 38%. That's probably the only place where I see people picking on it. But realistically speaking, let's not forget Microsoft doesn't put Outlook in its press release.So we're gonna have to wait to see what the outlook is for Azure. And then most importantly, let's not forget a Google cloud that reports next week is not going to grow 38 ...

Core Insights - Microsoft reported a slowdown in cloud business growth, leading to an over 8% drop in stock price during after-hours trading, which later narrowed [2][10] - The adjusted earnings per share were $4.14, exceeding the expected $3.97, while total revenue reached $81.27 billion, above the anticipated $80.27 billion [10] - For the second quarter of fiscal year 2026, Microsoft announced a year-over-year revenue growth of 17% [10] Financial Performance - The net profit for the quarter was $38.46 billion, translating to an earnings per share of $5.16, up from $24.11 billion (or $3.23 per share) in the same quarter last year [10] - Azure and other cloud services revenue grew by 39%, slightly down from 40% in the previous quarter, with market expectations for this segment being 39.4% and 38.9% [10] - Other income for the quarter was $9.97 billion, a significant increase from an expense of $2.29 billion in the same quarter last year [10] Business Obligations - As of year-end, Microsoft's commercial remaining performance obligations reached $625 billion, a year-over-year increase of approximately 110%, largely due to a $250 billion cloud services agreement with OpenAI [11] - 45% of the commercial remaining performance obligations are related to OpenAI [11] Business Activity - The growth rate of commercial order volume surged from 112% in the first quarter to 230% [12] Segment Performance - Intelligent Cloud segment, which includes Azure, reported revenue of $32.91 billion, a nearly 29% year-over-year increase, surpassing analyst expectations of $32.40 billion [7] - Productivity and Business Processes segment, which includes Office software, Dynamics, and LinkedIn, generated revenue of $34.12 billion, a year-over-year growth of about 16%, exceeding the expected $33.48 billion [7] - More Personal Computing segment, covering Windows, Xbox, Surface, and Bing, reported revenue of $14.25 billion, a decline of about 3%, falling short of the expected $14.38 billion [7] Capital Expenditure and Strategic Moves - Microsoft is continuing to build data centers equipped with specialized chips to support generative AI models, and has also leased computing resources from CoreWeave and Nebius [8][14] - Capital expenditures and financing leases totaled $37.5 billion, a 66% year-over-year increase, exceeding analyst expectations of $34.31 billion [8][14] - Microsoft announced a price increase for commercial Office software subscriptions and secured a $30 billion cloud services deal with AI company Anthropic, which includes an additional agreement for up to 1 billion watts of computing power [8][14]

80.2% 80.3%. So a beat on both the top and bottom lines. These very important numbers in terms of their cloud revenue, 32.91% billion estimates, we're calling for 32.39%.So another beat there. Azure and other cloud revenue FX. That's up 38% right in line with the estimates here.So they are posting beats across the board. They also crossed the $50 billion mark for cloud revenue this quarter for the first time. These numbers coming across.And as we're looking at the move the move is to the downside. We're dow ...

Group 1 - The fourth quarter earnings season is underway, with major tech companies like Microsoft, Meta, Tesla, and Apple leading the earnings calendar [1] - An optimistic consensus is forming, with 13% of S&P 500 companies having reported fourth quarter results, and analysts estimating an 8.2% increase in earnings per share for the quarter, marking the 10th consecutive quarter of annual earnings growth if this rate holds [2] - Analysts had initially expected an 8.3% jump in earnings per share heading into the reporting period, a decrease from the third quarter's 13.6% growth rate, but expectations have been raised for tech companies recently [3] Group 2 - The earnings season will test the improved stock market breadth observed at the start of 2026, with ongoing themes from 2025 such as artificial intelligence and economic policies continuing to influence investor sentiment [4] - In addition to the major tech stocks, earnings updates will come from a diverse range of companies including UnitedHealth, Boeing, General Motors, IBM, Starbucks, and others, indicating a broad economic impact [5]

The company said on Wednesday that revenue in the most recent quarter was $81.3 billion, but its share price dropped more than 5 percent in after-hours trading. ...

Microsoft's big financial bet on artificial intelligence got even bigger in the December quarter, but it also showed continued signs ...

Core Insights - Microsoft reported second-quarter revenue of $81.3 billion, exceeding Wall Street expectations [1] - Azure cloud services experienced a significant growth of 39% [1] - Microsoft Cloud revenue surpassed $50 billion for the quarter [1]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...