Microsoft's market saving earnings

The past week in the markets haven’t been quite good at all, at least if you’re an investor. Tech stocks like Tesla dragged down the market with their earnings and revenue miss, which was seen by the company’s 9% delivery miss. Nasdaq Composite has declined by more than 4.5% in the past week itself reflected by the weak earnings.

However, to change the narrative today, Microsoft could be the kryptonite that bulls are looking for, the company reported its earnings today and well, they sure as well exceeded the expectations. Here are a few highlights from their earnings report:

• Net income jumped by more than 26% as management cut down its spendings.

• Cloud based division, Azure saw a bump in revenue after seeing two consecutive years of decline.

• Revenue of $56.52 Billion v/s $54.50 Billion expected, almost a 13% increase from the last quarter.

• Net income rose by 27% to $22.29 Billion

Amidst the current outlook and trend in the economy, Microsoft posted strong numbers. Considerably strong to say the least. Fellow competitor and search engine leader Google missed out on their earnings and the stock tumbled after hours. Apart from cloud based business offerings from Microsoft, another section where it has been very dominant has been AI.

The company has invested more than $11.2 Billion into AI this year which is a 70% jump compared to the previous year, surely indicating their strong desire to take the lead in the AI race, and some even say that they already have the lead since they have a deal with OpenAI where they will get 70% of the profit until they recoup their initial return, and after that hold a massive 49% stake in the AI arm. In addition to that, next month onwards Microsoft will roll out their AI powered assistant for Microsoft 365, “Copilot”. It can be said that Microsoft is one of the very few companies that have a bulletproof and a recession proof control over their business which even in conditions with high interest rates, global wars, political shakedowns have prevailed as one of the most resilient companies in the eyes of investors.

It is safe to say that if the markets end up in green today, it could because of various reasons, one of which will be Microsoft.