On Wednesday, Microsoft’s strong earnings report resulted in a surge in its shares by approximately 7%, subsequently lifting the tech stocks. The company’s better-than-expected growth across various segments, including cloud computing and Office productivity software, boosted confidence that artificial intelligence would become a significant growth driver, thereby calming fears of a slowdown in cloud computing.
As a result, Microsoft’s market value is expected to rise by approximately $160 billion, replacing Saudi Aramco as the world’s second-most valuable company. At least 18 analysts have increased their price targets on the stock, with Piper Sandler’s Brent Braceli calling “AI-All Star” Microsoft’s results a remarkable feat.
Microsoft’s earnings report is also good news for an industry that has laid off tens of thousands of workers recently due to a sagging economy. As demand fades, Microsoft’s results suggest that there is still a strong market for cloud computing and artificial intelligence technology.
During the earnings call, Microsoft’s CEO, Satya Nadella, emphasized the growing importance of AI, mentioning it 50 times in a 60-minute event. This highlights the company’s commitment to investing in AI and indicates that it will continue to be a major driver of growth for Microsoft. The results of the earnings report have had a positive impact on other Big Tech peers such as Amazon, Meta Platforms, and Alphabet, with their shares rising between 1% and 3%.
