MSFT

Microsoft is experiencing slow growth, but is hopeful Microsoft Cloud can carry it into the future.

[Q2 2023 earnings call](https://www.shacknews.com/article/133817/miscrosoft-msft-q2-2023-earnings-call). [Microsoft (MSFT) Q2 2023 earnings results miss revenue expectations on in-line EPS](/article/133825/microsoft-msft-q2-2023-earnings-results-miss-revenue-expectations-on-in-line-eps) "The next major wave of computing is being born, as the Microsoft Cloud turns the world’s most advanced AI models into a new computing platform," Microsoft CEO and chairman Satya Nadella said in Tuesday's earnings report. Microsoft's overall outlook appears to be optimistic, as the company turns towards the Microsoft Cloud to push it forward. However, it falls short of the $52.94 billion that was expected. [Q2 2023 earnings report](https://www.microsoft.com/en-us/investor/earnings/fy-2023-q2/press-release-webcast) on the Microsoft website:

Microsoft (MSFT) was able to evade the bears late Tuesday when results from its cloud business impressed enough for the market to overlook its half-bi.

Early bulls in the market may want to brace themselves for a steeper retracement. The author makes no representations as to the accuracy, completeness, or suitability of this information. Bears could position themselves for a profitable trade idea in the coming days. Equities find themselves in the red once again. The author has not received compensation for writing this article, other than from FXStreet. The author will not be held responsible for information that is found at the end of links posted on this page. This would imply that the bottom in MSFT shares was in since Microsoft already produced a higher low on January 6, above the range low from November 4. It also does not guarantee that this information is of a timely nature. “The next major wave of computing is being born, as the Microsoft Cloud turns the world’s most advanced AI models into a new computing platform,” said Satya Nadella. This would likely bring more bulls to the fore. Microsoft (MSFT) was able to evade the bears late Tuesday when results from its cloud business impressed enough for the market to overlook its half-billion-dollar revenue miss. 18% still demonstrates that the growth in cloud has begun to slow, but nearly everyone knew that based on competitors like Amazon Web Services and Google Cloud.

Microsoft Corp.'s second-quarter profit topped analysts' estimates, helped by strength in its Azure cloud-services business even as demand slumped for ...

In Microsoft’s closely watched Azure cloud-computing business, sales gained 38%, compared with predictions for a 37% increase, excluding the impact of currency fluctuations. That compared with average analysts’ projections for $2.30 a share in earnings and $52.9 billion in revenue, according to a Bloomberg survey. Shares rose more than 4% in late trading.

Microsoft Corporation's Q2 '23 results showed a slight earnings beat, despite revenue falling short of expectation. Read more as we analyze MSFT's earnings.

[HoloLens group](https://www.bloomberg.com/news/articles/2023-01-18/microsoft-scales-back-hololens-business-after-setback-on-us-army-goggles) after “Congress [rejected](https://www.bloomberg.com/news/articles/2023-01-12/microsoft-combat-goggles-falter-as-congress-says-no-to-buying-more-this-year) the U.S. Ensuing improvements to the bottom line, and inadvertently, EPS expansion will likely “strengthen the bull case” for a more sustained recovery in Microsoft Corporation stock later in the calendar year, and offset any persistent top line deceleration coming off of the temporary macroeconomic headwinds. [previous coverage](https://seekingalpha.com/article/4549085-microsoft-q1-2023-quick-take-snooze-you-lose) on the stock, Microsoft has already incorporated OpenAI’s AI-enabled text-to-image tool, [DALL-E](https://www.bloomberg.com/opinion/articles/2022-10-14/microsoft-ai-art-app-could-help-curb-fake-images), into its new “ [Designer](https://www.cnbc.com/2022/10/12/microsoft-launches-designer-its-answer-to-highly-valued-startup-canva.html)” app, as well as other “ [Image Creator](https://www.bing.com/create) features for Bing and Microsoft Edge”. Taking into consideration an assumed average annual salary rate of $200,000 across all functions and levels within Microsoft, the latest reduction in force (“RIF”) enforced could result in annualized savings of as much as $2 billion, and bolster consolidated operating margins by 100 to 200 bps with an added $0.20 range boost to EPS. And this is consistent with the current situation, where the [rising volume of job cuts](https://www.bloomberg.com/news/articles/2023-01-20/google-cuts-add-to-tech-wipeout-that-s-claimed-over-100-000-jobs) across the tech industry, which has inadvertently driven down seat subscription volumes, will likely continue to weigh on PBP segment revenue growth within the near-term. [a third](https://www.bloomberg.com/news/articles/2023-01-20/who-uses-chatgpt-30-of-white-collar-professionals-tried-it-at-work) of [recently surveyed](https://www.fishbowlapp.com/insights/chatgpt-sees-strong-early-adoption-in-the-workplace/) American professionals indicating they have used “ChatGPT or another artificial intelligence program in their work,” Microsoft’s extended partnership with OpenAI will likely grow into a key competitive advantage over the longer-term, and further narrow the market share gap between Azure and industry leader AWS. While longer-term secular growth trends in cloud-computing persist due to the mission critical nature of related solutions for ongoing global digitization efforts – which we view to be beneficial for Azure, especially given growing adoption of a multi-cloud strategy to improve reliability and cost-efficiencies – accelerating “cloud spend optimization” implemented by customers to essentially “do more with less” as Nadella has preached, taken together with persistent input cost fluctuations (e.g., energy), will likely eat further into the business’ profit margins in the near-term as well. [recent retreat](https://www.bloomberg.com/news/articles/2023-01-03/dollar-makes-strong-start-to-2023-after-months-long-slump), alongside moderating benchmark Treasury yield, from its peak in late September on the back of improving inflation data that has traders dialing back on expectations for more aggressive Fed rate hikes as the year progresses. Although Surface device sales account for only a nominal mix of the company’s consolidated results, Microsoft’s flagship Windows operating system remains the “dominant operating system” for personal workstations, underscoring the MPC segment’s vulnerability to near-term deterioration in economic conditions. Taken together with the benefit of weaker PY comps from fiscal 1H23, when margins were blighted by higher energy costs, severance / restructuring costs, new acquisition (i.e., Nuance and Xandr) integration costs, and adverse FX headwinds, Microsoft is ripe for a turnaround in the second half of calendar 2023. Specifically, improvements to margin preservation and expansion amid the looming economic downturn will be a key driver of potential upside recovery for Microsoft in the second half of calendar 2023. [persistent softening](https://www.gartner.com/en/newsroom/press-releases/2023-01-11-gartner-says-worldwide-pc-shipments-declined-28-percent-in-fourth-quarter-of-2022-and-16-percent-for-the-year) in PC demand, which had, inadvertently, further slowed sales of its higher-margin Windows software – the dominant operating system for personal workstations.

Microsoft Corp posted results on Tuesday that showed some strength in the face of a weak economy, buttressed by a cloud business that hit Wall Street ...

He said revenue from OpenAI-related businesses would show up in revenue for Microsoft's cloud service Azure in the future. Sales at Microsoft's More Personal Computing segment, which includes Windows, devices and search revenue, declined 19% to $14.2 billion as the PC market continued to shrink. AWS dropped to 55% from 71% during the same period. In the second quarter revenue from that segment beat expectations slightly at $21.5 billion. The cloud business is under the spotlight again following the viral success of chatbot ChatGPT, which answers general questions in plain language using artificial intelligence. Microsoft's shares rose 4% initially after the results before reversing course to slip 1% to $239.58 in after-hours trade.

Call Participants. Prepared Remarks: Operator. Greetings, and welcome to the Microsoft fiscal year 2023 second quarter earnings conference call. At this time, ...

And we lapped the acquisitions both of Nuance and of Xandr. In the first half of the year, over 70% of our revenue came from our Commercial business and over 70% of that from Microsoft Cloud. I mean, you know, I think that you can -- you have a workload, you optimize the workload, and you start a new workload. While we had some more challenges on maybe a stand-alone sale of a new product where the cycle is going to be a little longer, right, and you're going to have to show that cost savings. And those are all the things that people will be able to sort of use to ensure that the ARPUs are also going up a bit value. Satya, I was hoping you could talk to us about, is there any expansion in the scope of what you guys are doing with OpenAI and the commitment that you guys are making in terms of sort of the compute capacity you're going to be giving to them? We expect COGS to grow between 1% and 2% in constant currency or to be between $15.65 billion and $15.85 billion and operating expense to grow between 11% and 12% at constant currency or be $14.7 billion to $14.8 billion. And finally, as a reminder, for Q3 cash flow, we expect to make a $1.2 billion cash tax payment related to the TCJA capitalization of R&D provision. Within the segments, we anticipate roughly four points of negative impact on revenue growth in Productivity and Business Processes, three points in Intelligent Cloud, and two points in More Personal Computing. Operating expenses increased 6% and 9% in constant currency, including roughly six points of impact from the Q2 charge noted earlier and three points of impact from the Xandr acquisition. In our per-user business, the Enterprise Mobility and Security installed base grew 16% to over 241 million seats with impact from the slowdown in growth of new business noted earlier. I want to start with the context I shared with our employees last week on the changing environment and our priorities.

Microsoft Corp. said revenue growth in its Azure cloud-computing business will decelerate by 4 or 5 percentage points in the current period and projected a ...

Today's instrument is the Microsoft Corp.'s stock traded in Nasdaq exchange under the ticker MSFT. Looking at the MSFT's chart, we can see that it was.

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