Microsoft Earnings Could be Flat This Year Due to Slow Cloud Growth

Microsoft (MSFT), America's second most valuable company, may say that cloud growth fell at its fastest rate in five years in the most recent quarter, copy of a serious economy for attractive new products of Big Tech.

Key TakeAways 

• Microsoft is ready to report a decline in its second consecutive year earnings.

• Investors will excavate for the performance of Intelligent Cloud and ChatjiPT Outlook.

• CEO Satya Nadella promised more detailed plans in this release. {alertSuccess}

According to estimates compiled by Visible Alpha, the Redmond, Washington-based company is expected to report an earnings of $ 16.7 billion or $ 2.24 cents per share, which is effectively unchanged effectively from the pre-year quarter. Revenue is expected to increase 3% year-on-year to $ 51.1 billion. The company will report the financial results of the third quarter of its financial year 2023 after the market is closed on Tuesday, April 25.

Investors will focus on the intelligent cloud segment, which has been the largest of Microsoft in each of the previous eight quarters. Cloud Revenue is expected to grow at the lowest rate in five years, increased by 15% to $ 21.9 billion. According to research firm Gartner, global expenditure on cloud services is estimated to reach a record of $ 592 billion in 2023, which is 21% higher than last year.

Cloud Revenue Made It Rain for Big Tech

Cloud Business Revenue in UsD Million

Numbers for 1QFY-2023 are estimates from Visible Alpha

However, Microsoft's cloud business may be a bright place as the company is estimated to fall in its personal computing segment to fall in revenue of two points, including devices such as Windows product and Surface Tablet and Xbox Gaming Consol.

Microsoft CEO Satya Nadella expects Microsoft's AI Tools to face questions about the impact of the future and cost cut measures. It is likely that Nadella will based on the company's most outlook promoting AI.

"The next large wave of computing is arising, as Microsoft Cloud converts the world's most advanced AI model into a new computing platform," he said in the last quarter's income release.

Microsoft enhances its partnership with Chatgpt manufacturer Openai in January, invested $ 10 billion in start-up, privately priced at $ 29 billion.

Microsoft's AI-Samed search engine, bing, crossed 100 million daily active users for the first time in March.

Despite the discussion, analysts expect an increase of only 4% in search and advertising revenue in the last quarter, while a year ago there was an increase of 22% in the same period.

Nadella will also provide updates on Microsoft's last earnings update to be announced on pruning, when the company reported the first decline in the adjusted income in eight years. Operating expenditure is estimated to increase by 10% below 18% in the previous quarter.

Microsoft Stock recently touched a 14 -year high, up to 20.40% above 20.40%. The Stock S&P500 is slightly ahead of the Information Technology Index, comparatively 20.13% in that period.