Seattle:Microsoft shares surged by over five percent following the announcement of better-than-expected revenue and profit, primarily driven by the growth of its Azure cloud computing division, which reported a 48 percent increase in the September quarter.
According to Bangladesh Sangbad Sangstha, Microsoft achieved a total revenue of $92.3 billion and a profit exceeding $36.6 billion, surpassing analysts' expectations of approximately $90.6 billion in revenue and $35.1 billion in profit, as reported by FactSet.
The quarterly earnings report was released shortly after Microsoft proposed voluntary buyouts to around 60,000 employees, about a quarter of its workforce, amid significant investments in artificial intelligence. This follows a similar offer made earlier in the year to seven percent of its U.S. workforce. As of the end of June, Microsoft had 223,000 employees worldwide, down from 228,000 the previous year.
Additionally, Microsoft has launched a new Surface Ultra laptop featuring Nvidia's artificial intelligence chips, priced at over $2,500, as part of an industry-wide initiative to develop hardware capable of handling more AI computations locally, rather than relying on cloud data centers.
In terms of spending, Microsoft has nearly doubled its expenditure on "property and equipment" to $39 billion compared to the same period last year. The company's overall capital expenditures reached $45.2 billion, with a significant portion allocated to "short-lived assets" such as memory chips and storage. Microsoft plans to increase its capital expenditures to over $50 billion in the final quarter of 2026, aiming for a total annual spending of $170 billion.
Microsoft remains the second-largest cloud computing services provider globally, following Amazon Web Services (AWS), with Google in third place. However, Google's cloud division reported a doubling of revenue to $30.7 billion during the quarter, nearing Microsoft's Azure revenue of $33.2 billion.
In the broader tech industry, companies are expected to collectively invest billions in AI-related expenses, with giants like Alphabet and Meta raising substantial funds to support their AI initiatives. Alphabet recently raised $85 billion for AI data center expansion, while Meta plans to raise $35 billion through a stock offering to fund its AI investments. Amazon is set to announce its quarterly earnings soon.