Microsoft earnings call: What can we expect from MSFT’s Q2 report

Microsoft (MSFT) is set to report its second-quarter earnings for the 2024 fiscal year after the market closes today (Jan 30).

Analysts expect the world’s most valuable company to post strong results across its business segments as demand for cloud computing and artificial intelligence (AI) services continues.

Microsoft is charging full steam ahead on commercializing generative AI capabilities. This month, the tech giant opened up AI writing tool Copilot Pro to all consumers for $20 per month. It also removed previous restrictions on its Copilot for Microsoft 365 so any business can now access the AI-powered productivity features.

The company has invested heavily in OpenAI, the maker behind ChatGPT, as it looks to solidify itself as a leader in the red-hot AI space. Rivals like Alphabet, Amazon and Meta are racing to keep pace with their AI investments and products. Microsoft’s upcoming earnings will offer clues into whether its AI focus is paying off. Spoiler: it most likely is.

Wall Street analysts forecast Microsoft will report adjusted earnings per share (EPS) of $2.78 on revenue of $61.1 billion for the quarter. This would represent impressive year-on-year growth when the software posted EPS of $2.32 on $52.7 billion in revenue.

The star of the show will likely once again be Microsoft’s Intelligent Cloud segment which contains its Azure public cloud platform. Intelligent Cloud revenue is projected to climb 18% year-over-year to $25.3 billion. Total commercial cloud revenue could top $32.2 billion, up 19% from last year’s quarter.

Analysts will be listening closely for an update on Azure’s growth rate and how that business performs relative to rivals like Amazon Web Services and Google Cloud. Adoption of AI tools and services like Microsoft’s Copilot will also be an area of focus.

Microsoft 365 and LinkedIn should drive top-line growth and the Productivity and Business Processes segment is expected to generate $19 billion in the quarter, 12% higher than the prior year period.

The personal computing unit, consisting of Windows, devices, gaming and search is forecast to notch $16.8 billion in sales. Investors will be keen to hear about demand trends for Windows 11 and Xbox gaming services.

Microsoft’s earnings call will take place on January 30 at 2:30 pm PT / 5:30 EST. It can be listened to live on the company’s investor site.

Microsoft remains well positioned heading into its earnings report, riding tailwinds from businesses digitally transforming operations via cloud computing and AI.

Featured image: Dall-E

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