00:00 Speaker A
let’s kick it over to Yahoo Finance’s tech editor Dan Howley for those results.
00:02 Speaker A
Dan, what are you seeing?
00:03 Dan Howley
one of the uh things that they’re pointing out is that their AI business now has a $37 billion annual revenue run rate. They say that’s up 123% year-over-year. But we’re seeing shares reverse course after they initially started to rise, and it’s unclear exactly why. Obviously, Microsoft has been kind of the laggard among the Mag 7. It was down as much as 20% over the last six months. Uh but they did beat when it comes to their intelligent cloud segment, uh not by uh sorry, their productivity and business process segment, not by a whole heck of a lot. Ditto the intelligent cloud, that came in at 34.68. Wall Street was looking for 34.31. So, you know, not an incredibly large beat. Uh and they did have a little help from their uh more personal computing segment, which outperformed. That despite that uh whole memory shortage kind of throwing uh some the the wrench into the works when it comes to PC sales. But obviously, the big deal uh being that AI number uh and seeing that growth. That’s been a concern for a lot of folks. So we’re going to see what they have to say on the earnings call about outlook for the uh current quarter.
01:03 Speaker A
Yeah, uh Ivana, Dan making the point there. stock is slipping here, but we don’t have, you’re going to get guidance on the call from CFO Amy Hood and that obviously can move the stock a lot in the after hours. Key number here, Microsoft Q3 Azure and other cloud revenue, XFX plus 39%, estimate was 38.2%. What do you think?
01:18 Ivana
So this is probably a small bit and that’s why the stock is not really overreacting. I think um investors are a little concerned about Anthropic’s impact on um on Microsoft’s products, right? Because these are the type of products that Microsoft was supposed to be coming up with, not competitors. So I think that’s really the reason why the stock is out of favor. So they really would have had to make something game-changing or or say something game-changing on the call about their strategy going forward, about how they’re going to address this and how they’re going to catch up.