(News Bulletin 247) – The Redmond company published quarterly results that beat expectations in terms of both revenue and earnings per share. ChatGPT integration has ported cloud computing services.

Clearly Microsoft is the star of this early session on Wall Street. The action of the Redmond-based IT services group jumped 7.4% in early trading.

The company headed by Satya Nadella has published satisfactory results, which testify to the ascendancy that the company has taken in artificial intelligence, through the integration of technologies from its partner OpenAI, the creator of the conversational robot ChatGPT. And in which Microsoft has invested more than 10 billion dollars, according to American media.

In the third quarter of the group’s 2022-2023 financial year, ending next June, revenues increased by 7% in published data and by 10% excluding currency effects, to 52.9 billion dollars, while its profit per share was $2.45 per share. According to CNBC, analysts had expected earnings per share of $2.23 and revenue of $51 billion.

Azure powered by ChatGPT

Its dematerialized IT services division (cloud), very popular in the market, met expectations. Its growth reached 22% on a reported basis and 25% excluding currency effects. Its flagship brand in this area, Azure, even grew by 31% excluding currency impact. The Azure Open AI service, which integrated ChatGPT in March, now has more than 2,500 customers, a 10-fold increase over a quarter, said Satya Nadella, the company’s chief executive, during a conference call with analysts. Cloud services now account for more than half of Microsoft’s revenue.

The momentum should continue in the next quarter: Chief Financial Officer Amy Hood said the company expects Azure to grow between 26% and 27% excluding currency effects for the three months to June.

The unbridled growth of the cloud allows Microsoft not to really suffer from the fall in Windows licenses for personal computers, down 28% year-on-year, and revenues from its tablets, computers and consoles, which are down 30% over a year.

Lagging Alphabet

Quoted by CNBC Goldman Sachs and Morgan Stanley confirmed their positive views on value, respectively to buy and to “overweight”.

“We believe Microsoft is one of the most attractive investment opportunities in the tech industry and across all sectors,” Goldman Sachs analyst Kash Rangan wrote. Morgan Stanley’s Keith Weiss praised Microsoft’s “differentiated positioning in public cloud and generative artificial intelligence, as well as its unique ability to deliver consolidated solutions.”

In any case, the market seems to give Microsoft a good head start over Alphabet, Google’s parent company, in the race for artificial intelligence. If Microsoft jumps, therefore, on Wall Street, the title of the Mountain View group only gains 1.3%, despite good quarterly results and an operating margin in the green for Google Cloud, which is a first.

It should be noted that the action Microsoft does not suffer from the announcement concerning its takeover of the video game studio Activision Blizzard, which was blocked by the British policeman of competition, the CMA, this Wednesday.