Microsoft (MSFT) will report its profits in the second quarter after the bell on Wednesday, where Wall Street continues to digest the implications of Depsik’s impact on the artificial intelligence industry and the Betion Valley Silicon Valley.
Microsoft and Big Tech Touor Invest tens of billions of dollars in data centers and infrastructure needed to train and publish AI programs through their various services. But Dibsic in China raised the general thinking that developing artificial intelligence models requires the use of stronger and expensive chips with their launch R1 Model on January 20.
The model has been trained, as the company claims, on systems that were less powerful and less expensive than those produced by American competitors such as Microsoft Openai, Google (Googl, Googl) and Meta (Meta).
The company application was launched on top of the application store during the weekend, which prompted a huge amount of attention to the shares of the small company that is relatively navigated, including Ai Belwether Nvidia.
Now Microsoft will have to prove not only that its artificial intelligence does its fruits in terms of increasing revenues, but also that the huge infrastructure investments are really necessary.
For a quarter, Microsoft is expected to report one arrow’s profits (EPS) of $ 3.13 on revenues of $ 68.8 billion, according to Bloomberg unanimity data. The company has reported $ 2.93 for $ 62 billion in revenues in the same quarter of last year.
More importantly, it is expected that the revenue of the commercial cloud sector from Microsoft, which includes sales of cloud services, is expected to come with $ 41.1 billion. This will be an increase of $ 31.9 billion that the company mentioned in the second quarter of last year. Its smart cloud works, which include the Azure platform, are scheduled to reach $ 25.8 billion, an increase of 21.5 billion dollars.
In a note for investors, Jefferies Brent Thill analyst said he believed the growth of Azure will start a reaction in the second half of 2025.
“Our checks continue to refer to improving cloud trends for consumption/basic,” wrote. Also, (Microsoft) has just announced that “Openai has recently made a new major commitment to the Azer that will continue to support all Openai products in addition to training. “” “
While Microsoft is one of the main beneficiaries in the boom of artificial intelligence, the price of his share has been late for competition. Microsoft shares have increased by only 5 % over the past 12 months from Monday, while Amazon shares (AMZN) increased, and Google shares rose 44 % and 26 %, respectively.
However, Evercore ISI KIRK MARK MARK MARK MARK MARK MARK MARK MAIRNE can create “mini -revenge trade” with an increase in artificial intelligence sales, improve COPILOT, and moderate capital expenditures, creates more free cash flow.
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