Microsoft Stock Soars After ChatGPT Investor Says AI Boosted Cloud Computing Business
Microsoft saw a 7% jump in its stock price on Wednesday after it reported that its AI offerings helped to increase the sales of its cloud computing business in the past quarter. As a result, Microsoft's market capitalization surged by another $140 billion. The company released its quarterly earnings after Tuesday's closing bell, which revealed earnings per share of $2.45 and revenue of just under $53 billion, both surpassing the expectations of Wall Street predictions.
During the last quarter, Microsoft expanded its ongoing partnership with OpenAI and launched a new version of its search engine Bing, which is powered by the intelligent language tool ChatGPT. In a post-earnings conference call, Microsoft's CEO Satya Nadella said that "investing to lead in the new AI wave" would be one of the company's main business priorities. Nadella added that the developments in AI technology were already boosting Azure's sales.
Furthermore, Nadella stated that Bing now has over 100 million daily users and has seen an increase in downloads since Microsoft announced integration of ChatGPT technology into the search engine. The growth of Azure, Microsoft's cloud computing platform, was significant as revenue from Azure increased by 27% year-on-year for the first three months of 2023. Customers are continuously choosing Microsoft's ubiquitous computing fabric in every application ranging from cloud to edge, especially as every application becomes AI-powered.
Other cloud providers such as Google's parent company Alphabet and Amazon have also reported strong results. Amazon's first-quarter earnings will be published on Thursday, while Alphabet traded flat at the opening bell after reporting its results on Tuesday. Despite the UK competition regulator's decision to block Microsoft's $75 billion acquisition of Activision Blizzard on Wednesday, the tech giant's stock prices remained unaffected.
Microsoft and other tech giants like Google and Baidu are preparing their own versions of intelligent language tools, and Microsoft's success with ChatGPT shows that AI-powered technology is gaining importance in the tech industry.
