One of the largest names in Big Tech is not performing well in the market in terms of its shares, as Microsoft reported that its shares fell because of Azure's slow growth over the past year. This is despite the company's ramped efforts towards growing its artificial intelligence developments with OpenAI which is already widely accessible for many.
Still, Microsoft beat Wall Street expectations on this quarter's revenue, with the company reporting massive earnings that make this an overall win for the company.
Microsoft Beat Wall Street Expectations on This Quarter's Revenue
(Photo : Sean Gallup/Getty Images)
Microsoft released its earnings report for FY23 Q4 which was completed last June 30, 2023, with the company reporting a massive $56.2 billion revenue for this quarter. The company beat Wall Street expectations on this quarter's revenue and claims that it beat its last year's results by as much as 8 percent (10 percent in constant currency).
For Microsoft's fiscal year which also ended on June 30, the company reported a significant increase compared to last year's end, with the company reporting this year's earnings at $211.9 billion, up by 7 percent.
It was a massive fiscal year for Microsoft, paired with the introduction of its AI ventures which drove significant growth earlier this year.
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Despite a High Revenue, Its Shares Fell Because of Azure
However, these massive wins did come at a cost for Microsoft as according to The Guardian, Microsoft's shares fell because of Azure's slow growth on the market.
Azure only saw a 26-percent growth in this fiscal year compared to last year's 27-percent increase for cloud computing services.
This also comes at a time when Microsoft is highly-focused on its AI developments with OpenAI, particularly for its Bing, Office 365, and other integrations.
Microsoft's Massive Ventures on AI
Microsoft dealt all of its cards and threw in all of its chips with artificial intelligence, and it has proven to be an astronomical development for the technology company. Earlier this year, Microsoft extended its partnership with OpenAI for the continued support and development of its AI ventures under this multi-billion dollar deal.
AI has been massive for Microsoft over the past few months, and the company rode on a massive high in the first half of the year thanks to its ChatGPT integration with Bing, its already AI-powered browser. The massive integration also saw the arrival of GPT-4, the latest LLM from OpenAI, for the Bing browser for better and wider access to its tech.
While AI had been the most significant addition to Microsoft's technology and offers this year, it was not the golden goose that it may have expected as its other services stood alone in the market. Its cloud service, Azure, faced slow growth this quarter, hence affecting the company's shares, with AI to remain one of its focuses for now.
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