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Microsoft (Nasdaq: MSFT) is in the process of delivering its third-quarter financial results after the close of trading on Tuesday, and a lot of Wall Street will be paying attention to what the software giant has to say about the Azure cloud. business and the massive push into the field of artificial intelligence.
Analysts currently estimate that Microsoft (MSFT) will report a profit of $2.23 per share on $51 billion in revenue for the fiscal third quarter. Over the year-ago period, Microsoft (MSFT) earned $2.22 per share, on $49.4 billion in sales.
Goldman Sachs analyst Kash Ranjan said Wall Street was worried about a possible slowdown in the growth rate of Microsoft Azure Services (MSFT). However, Ranjan added, “we see signs that this growth can plateau” starting in the company’s fourth fiscal quarter, given improvements in workload growth and the need for customers to “use up” unused cloud credits. Such momentum could create what Ranjan called a “tailwind” as clients push their spending plans into the second half of this year.
AI will also be in the spotlight as Microsoft (MSFT) has gotten into the technology with a multi-billion dollar investment in ChatGPT developer OpenAI, adding these AI capabilities to the Edge browser and Bing search engine.
Given its investment in ChatGPT, Microsoft (MSFT) in two years could overtake Google (GOOG) and other players in the AI market, Dan Ives, an analyst at Wedbush, said Monday.
Not all Microsoft Monitors (MSFTs) in the company are sold as an investment. Alpha contributor Dyer Sansizbayev said it’s hard to overshadow Microsoft’s “strong financials” that include “amazing revenue growth,[and]increasing profit margins.” However, Sansyzbayev said he is concerned that the “current headwinds” in the larger economic environment could cause Microsoft (MSFT) to miss out on analyst earnings forecasts.
More on Microsoft:
Microsoft, Google, and the “moment of truth” for upcoming earnings from technology
Microsoft has seen leading an AI arms race for up to two years
Microsoft Azure may be a leader in generative AI, but AWS isn’t far behind
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