Microsoft Corp. surpassed quarterly revenue and profit expectations on Tuesday, owing to the growth in its cloud computing and Office productivity software divisions. Microsoft also claimed that sales of artificial intelligence-related products were increasing. The company predicted that revenue in its key segments will meet or exceed Wall Street forecasts for the current quarter.
Following a revelation by Redmond, Washington-based Microsoft that earnings were $2.45 per share in the third quarter, topping Wall Street projections of $2.23 and up 10% from the same quarter last year. Additionally, the shares increased 8.3% in after-market trade.

Microsoft was the biggest drag on the S&P 500 on Tuesday ahead of its report. It went down to 2.2% in regular trade as a result of earnings-related concerns. According to Refinitiv, revenue increased 7% to $52.9 billion in the three months ending in March, barely surpassing the $51.02 billion average analyst projection. Microsoft continues to generate the majority of its revenue by providing customers with software and cloud computing services.

The company kept the headlines engaged with its collaboration with OpenAI, the firm behind ChatGPT, and its use of AI to improve the Bing search engine. According to the consensus of 23 analysts surveyed by Visible Alpha, Microsoft stated growth at its cloud company Azure was 27% in the most recent reported quarter, exceeding analyst estimates for 26.6% growth.
While conversing with the investors over a conference call, Chief Executive Satya Nadella stated that the company had over 2,500 users of Azure-OpenAI services and that a variety of products included AI-powered capabilities. According to Nadella, Bing, which has traditionally been second-best behind Google in terms of search engine usage, now has 100 million daily users and has experienced a rise in downloads.

In contrast to Wall Street’s average expectation of $23.8 billion, Microsoft expects sales in the Intelligent Cloud unit for the current quarter, the fourth fiscal quarter, to be between $23.6 and $23.9 billion. It reported revenue in the More Personal Computing sector of $13.35–13.75 billion, exceeding the $13.2 billion expectation made by Wall Street. Office is part of the Productivity and Business Processes unit, which was projected to generate sales of $17.9–18.2 billion, above the average forecast of $17.8 billion set by analysts.