Key insights
- Microsoft's cloud revenue growth accelerated, and capital expenditure was lower than expected. This suggests efficient scaling of cloud operations and positive momentum in their AI investments. Lower capex spend may alleviate investor concerns about near-term profitability, supporting a modestly bullish outlook for MSFT and potentially the broader tech sector.
Microsoft's cloud revenue growth increased in the March quarter while its spending rose less-than-expected as the software giant looks to convince investors that its big bet on artificial intelligence would pay off.
Capital expenditure rose 49% to $31.9 billion in the company's fiscal third quarter, the company said on Wednesday, compared with Wall Street expectations of $34.90 billion, according to Visible Alpha. Spending had totaled $37.5 billion in the second quarter.