Satya Nadella, CEO of Microsoft, arrives for the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, July 9, 2024.
Brendan McDermid | Reuters
Microsoft will report fiscal second-quarter results after the U.S. market close Wednesday.
Here’s what analysts are looking for, according to LSEG:
- Earnings per share: $3.11
- Revenue: $68.78 billion
Wall Street predicts approximately 11% growth year over year for the quarter that ended Dec. 31. That would represent Microsoft’s slowest revenue growth since June 2023. The company warned in October that Azure cloud growth would slow down in the fiscal second quarter because of a delay from a third-party provider.
Analysts polled by CNBC and StreetAccount expect 31.9% and 31.1% growth from Azure and other cloud services, respectively, in the quarter. Azure revenue grew 33% in the fiscal first quarter.
During the fiscal second quarter, Microsoft announced the Windows 365 Cloud Link, a PC that corporate workers can use to access their applications and files stored in the cloud. The company’s GitHub unit announced support for artificial intelligence models from Anthropic and Google for a programming chatbot in addition to existing support for OpenAI. Microsoft also invested an additional $750 million into OpenAI during the quarter.
Analysts might ask management why Microsoft did not participate in a Jan. 21 White House press conference for the Stargate AI infrastructure project involving OpenAI that could attract up to $500 billion in investment.
Microsoft shares slipped 2% on Monday as investors considered the implications of AI models from DeepSeek, a Chinese lab. DeepSeek in December introduced an open-source model that the lab said it trained for $5.6 million, excluding costs of data and earlier research. That would make it more efficient than models from major U.S. companies. And last week, DeepSeek said its newest model, R1, outperformed OpenAI’s in some tests.
“We should take the developments out of China very, very seriously,” Microsoft CEO Satya Nadella said Jan. 22. Nadella has committed to spending $80 billion on AI infrastructure in the current fiscal year.
Microsoft shares are up 6% in 2025, while the S&P 500 index has gained 3% in the same period.
Executives will discuss the quarterly results with analysts and issue guidance on a conference call starting at 5:30 p.m. ET.
This is breaking news. Please check back for updates.
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