Microsoft posts quarterly sales and profit surge, beating Wall Street expectations

Microsoft It reported Wednesday that its quarterly sales rose 18% to $77.7 billion.

The software maker reported a 22% increase in quarterly profit to $30.8 billion, or $4.13 per share, which lagged behind. wall Street Expectations for the July-September period. Microsoft said those results did not include the impacts of the nearly $3 billion it invested OpenAI During that period, in an effort to “help clarify” how those losses affected Microsoft’s core business.

Microsoft was expected to earn $3.67 per share on revenue of $75.38 billion, according to analysts surveyed by FactSet Research.

The results come a day after a new deal with OpenAI took Microsoft’s valuation to $4 trillion for the second time this year. But Microsoft shares fell just hours before it revealed its earnings on Wednesday, as the company grappled with an outage affecting its Azure cloud computing platform.

Investors got excited Tuesday after Microsoft announced a revised trade agreement with its longtime partner OpenAI. chatgpt And now the world’s most valuable startup. Although no longer OpenAI’s exclusive cloud provider, a relationship that helped bankroll the startup’s early growth, Microsoft will retain commercial rights to OpenAI products until 2032 and will acquire a roughly 27% stake in OpenAI’s new for-profit arm.

Microsoft’s valuation had earlier crossed $4 trillion in July, after which it became the second company. NVIDIA To reach milestones. Microsoft crossed the $4 trillion mark again this week and Apple crossed the $4 trillion mark for the first time, while Nvidia achieved a different milestone: the first $5 trillion company.

The skyrocketing valuations highlight investor frenzy over artificial intelligence, which some fear could turn into a recession if AI products don’t turn out to be as transformative or profitable as promised.

Microsoft’s recent focus has been on introducing its flagship AI assistant Copilot to help with a variety of work tasks, and last week it was given a new animated avatar exterior called Micro.