Azure growth also came in ahead of estimates up 40% year-over-year. Joining us now is Brent Phil from Jeff. Uh stocks down about three and a half percent right now.Brent, why >> Azure uh was a slight miss. The street one a little bit higher on that growth that you just mentioned. And uh I think that's really largely it.All the other metrics look good. I think the street's not picking up on the booking and the the actual RPO. And if you look at those numbers, you're talking about a a commercial booking numbe ...

Core Insights - Microsoft Azure's growth was reported at 40% year-over-year, slightly missing market expectations, which anticipated higher growth [1] - The company achieved a commercial booking number of 112% and over 50% growth in Remaining Performance Obligations (RPO), indicating strong future performance [2][5] - Microsoft demonstrated better-than-expected margins, countering concerns about profitability in AI investments, with margins close to 40% [9][10] Financial Performance - The stock experienced a decline of approximately 3% following the earnings report, despite strong underlying metrics [1][4] - The significant increase in RPO and bookings suggests robust future revenue potential, with the OpenAI commitment of $250 billion not included in the current figures [2][12] - Capital expenditures (capex) are rising across the industry, with Microsoft, Google, and Meta all increasing their spending, indicating a positive outlook for growth in the hyperscaler environment [3][8] Market Position and Strategy - Microsoft is well-positioned to monetize AI due to its extensive application ecosystem, which includes productivity apps and enterprise resource planning (ERP) solutions [11] - The company is effectively pricing its AI services, leading to margin improvements rather than declines, which was a common expectation [10][9] - The ongoing investment cycle in AI is expected to last for many years, with analysts projecting sustained growth for hyperscalers like Microsoft [7][8]

Core Insights - The increasing demand for technology, particularly AI, is raising concerns about the environmental impact, specifically the freshwater usage required for data centers [1][4][5] - Comparisons are being drawn between the current tech stock environment and the dot-com bubble, with questions about whether stock values have become unreasonable [2][4] - The concentration of investments in major tech firms poses risks for investors, as even those not directly holding tech stocks are affected through major indices like the S&P 500 [3][5] Investment Landscape - Major tech firms are heavily investing in AI, with expenditures reaching hundreds of billions, yet revenue generated remains significantly lower, raising concerns about profitability [6][8] - The projected energy demand for AI could require $500 billion in annual capital expenditures by 2030, leading to a potential revenue gap of $800 billion [8] - Despite a combined market valuation of $1 trillion for 10 AI startups, none have reported profits, indicating a potential overvaluation in the sector [9] Strategic Considerations - Financial advisors are urging clients to remain cautious and consider diversifying investments into sectors like emerging markets, water, metals, and energy [4][11] - Portfolio strategies may include investments in natural gas, nuclear energy, and technologies related to water supply and purification [11] - Clients are encouraged to understand their investments better and manage liquidity, as the market may experience volatility related to AI developments [10][11][12]

Company Restructuring - OpenAI 宣布重组，成立“公共利益公司” [1] - 此举旨在吸引更多投资者 [1]

Google parent Alphabet surpassed analysts’ estimates for the third quarter on Wednesday. Total revenue rose 16% year-over-year to $102.3 billion, beating estimates by the 16 analysts surveyed by Zacks Consensus Estimate who projected an increase of 13.6% compared to the year-ago quarter. “Alphabet had a terrific quarter, with double-digit growth across every major part of our business. We delivered our first-ever $100 billion quarter,” said Sundar Pichai, CEO of Alphabet and Google, in a statement. Dilu ...

Core Insights - Microsoft is experiencing strong demand across its cloud services, particularly Azure, which is expected to grow approximately 37% in the upcoming quarter, indicating capacity constraints through at least the end of the fiscal year [1][2][7] - The company's cloud revenue surged around 26% to $49.1 billion, with Azure-related services growing about 40% year over year, driven by AI-related workloads [2][4][9] - Despite a significant increase in capital expenditures to roughly $35 billion, free cash flow rose 33% year over year to $25.7 billion, demonstrating the company's ability to scale profits alongside infrastructure investments [6][12] Financial Performance - Microsoft reported revenue of $77.7 billion for its fiscal first quarter of 2026, an 18% increase year over year, with adjusted EPS of $4.13, surpassing Wall Street's estimate of $3.67 [5] - Operating income rose 24% year over year to $38 billion, showcasing the company's profitability despite record spending [4] - Intelligent Cloud revenue jumped 28% to $30.9 billion, driven by Azure and a surge in AI-enabled workloads [9][10] Demand and Growth - Commercial bookings soared 112%, largely due to OpenAI's commitments to Azure, indicating strong future revenue potential [8] - Remaining performance obligations surged 51% to $392 billion, highlighting a significant backlog of future revenue [10] - The company is increasing its spending on GPUs and CPUs to meet accelerating demand, with expectations for FY26 growth rates to exceed those of FY25 [7][8] Challenges and Market Reactions - Shares slipped almost 4% in after-hours trading, reflecting high investor expectations and a desire for more than just cloud growth and capital expenditure promises [3][15] - An outage affecting Azure and other services occurred shortly before the earnings report, which may have impacted market perception [5][14] - Despite the challenges, the company is focused on building a substantial base for future growth, shifting the narrative from merely achieving growth to monetizing that growth effectively [15]

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. When Bill Gates cautioned Satya Nadella that Microsoft Corporation's (NASDAQ:MSFT) $1 billion OpenAI investment could go up in flames, few could have imagined it would turn into a $135 billion stake. From Lighting Money On Fire To A $135 Billion Win Microsoft shares climbed nearly 2% Tuesday after the company unveiled a new chapter in its partnership with OpenAI, converting its stake into a 27% ownership i ...

Elon Musk’s lawyer pledged to continue the billionaire’s legal crusade against OpenAI as he slammed the attorneys general of California and Delaware for not blocking the artificial intelligence startup’s restructuring as a for-profit company https://t.co/tH8X9a2V14 ...

Microsoft & OpenAI Partnership - Microsoft's 27% stake in OpenAI is valued at $135 billion [1] - This valuation is based on the latest for-profit agreement between the two companies [1] Market Insights - Intelligent Alpha views its investment in Microsoft as indirect exposure to OpenAI [1] - Discussion around AI capex spending and Nvidia's latest partnership announcements [1]

Core Insights - Microsoft reported better-than-expected fiscal first quarter results, with significant growth in its Azure cloud business, which saw a revenue increase of 40% [1][2] - The company's total revenue reached $77.67 billion, surpassing expectations of $75.33 billion, marking an 18% increase from $65.6 billion a year ago [1] - Net income rose to $27.7 billion, or $3.72 per share, compared to $24.67 billion, or $3.30 per share, during the same period last year [1] Revenue Breakdown - The Intelligent Cloud unit, including Azure, generated $30.9 billion in revenue, up 28%, exceeding the consensus of $30.25 billion [2] - Azure revenue specifically grew 40%, or 39% in constant currency, surpassing analyst expectations of 38.2% [2] - The Productivity and Business Processes segment, which includes Office and LinkedIn, reported $33.0 billion in revenue, slightly below the $32.33 billion consensus [3] - The More Personal Computing unit, covering Windows, search advertising, devices, and video games, achieved $13.8 billion in revenue, up 4% and above the $12.83 billion consensus [3] Growth Drivers - Cloud services remain a primary growth driver for Microsoft, benefiting significantly from the artificial intelligence boom [4] - Microsoft disclosed that revenue from Azure and other cloud services is projected to exceed $75 billion in fiscal 2025, reflecting a 34% increase from the previous year [4] - The company's AI momentum is largely attributed to its partnership with OpenAI, which has been instrumental in driving growth [4] OpenAI Stake - OpenAI announced its restructuring, revealing Microsoft's 27% stake in the for-profit arm, valued at approximately $135 billion [5] - OpenAI's nonprofit will hold a 26% stake worth about $130 billion, with the remaining 47% owned by current and former employees and investors [5] - Microsoft is scheduled to hold its quarterly call with investors, indicating ongoing engagement with stakeholders [5]