Recently, Microsoft's investors have expressed concerns about the growth of its cloud computing service, Azure. They are pondering whether the significant investments Microsoft has made in artificial intelligence (AI) development can yield corresponding commercial returns.
According to reports from data analysis firm Visible Alpha, Azure's growth rate has remained stable over the past few quarters, reaching 31%. However, investors are hoping for more significant growth driven by AI, as AI contributed seven percentage points to Azure's growth in 2024.
As major tech companies like Microsoft, Google, and Meta are actively pushing forward AI development, analysts predict that Microsoft's capital expenditure has increased by 53% year-over-year, expected to reach $13.64 billion within the year. Despite this, there are concerns that excessive spending on data centers may not yield substantial returns in the short term. Such worries have also triggered fluctuations in the US stock market and affected Alphabet's stock price, the parent company of Google. Although Alphabet's profits rose by 29% in the last quarter, benefiting from its significant investments in AI, Microsoft's investors hope for "sustained acceleration in revenue growth," or they may face disappointment.
By 2024, Microsoft's stock price has risen by 13%, adding over $350 billion to its market capitalization. Forecasts suggest that the company's revenue for the period from April to June 2024 is expected to increase by 14.6%, but this represents a 17% decline from the previous quarter. Analysts point out that this decline is mainly due to the weak growth in the personal computing business, including Windows and the Xbox gaming division.
Additionally, on July 19, Microsoft experienced a global-scale outage related to cybersecurity software CrowdStrike, affecting multiple critical services including emergency services, banks, airports, and broadcasting companies.
Key Points:
🌟 Azure's growth is stable, but investors are looking for higher AI returns.
📈 Microsoft's capital expenditure has increased by 53% year-over-year, but short-term returns are questionable.
🔍 Recent outage incidents have drawn attention to Microsoft's market performance and volatility.