Microsoft Q1 earnings top Wall Street estimates

Core Insights - Microsoft reported Q1 earnings with revenue of $77.67 billion, exceeding street expectations of $75.55 billion, while Azure's revenue grew by 39% [1][5][11] - Despite strong performance in cloud services, shares fell approximately 4% post-earnings, indicating market volatility and potential investor disappointment [2][3][6] - The company is expected to provide forward-looking guidance during the earnings call, which is crucial for investor sentiment [6][7] Financial Performance - Q1 intelligent cloud revenue reached $30.9 billion, surpassing the expected $30.18 billion [1] - Capital expenditures for Q1 were reported at $34.9 billion, up from $24 billion in the previous quarter, indicating increased investment in infrastructure [8] - Azure's constant currency growth of 39% was noted as a strong performance, although some investors had anticipated a 40% growth [10][11] AI and Strategic Partnerships - Microsoft holds a 27% stake in OpenAI's new for-profit public benefit corporation, valued at approximately $135 billion, which is expected to enhance its AI capabilities [4][16] - The AI contribution to Azure's growth is estimated to be in the low to mid-teens percentage-wise, with the potential for further growth as workloads shift from training to inferencing [12][15] - The partnership with OpenAI is seen as mutually beneficial, with Microsoft needing OpenAI for its AI advancements and OpenAI benefiting from Microsoft's resources [17][18]