Microsoft stock falls over 5% due to disappointing forecast despite strong earnings report

From CNBC: 2024-10-31 15:02:33

Microsoft CEO Satya Nadella spoke at an event on artificial intelligence in Jakarta. Despite a strong earnings report, Microsoft shares fell over 5% due to concerns about future projections. Revenue for the period ending in December is expected to be between $68.1 billion and $69.1 billion, with a 33% increase in cloud infrastructure business revenue. Google reported 35% annual growth in its cloud business.

Analysts at BofA Global Research view Microsoft’s Q1 results positively and recommend buying the stock. Fiscal first-quarter revenue increased 16% year-over-year to $65.59 billion, exceeding analyst estimates. Net income rose 11% to $24.67 billion. Microsoft is facing supply chain delays for data center infrastructure, impacting its ability to meet demand in the next quarter.

Microsoft’s AI investments are a major focus, with the company investing close to $14 billion in OpenAI. CFO Amy Hood expects a $1.5 billion hit to income in the current period due to expected losses from AI investments. Spending on property and equipment grew 50% year-over-year to $14.92 billion. Microsoft shares are up 9% for the year, while the Nasdaq has risen 21% in the same period.



Read more at CNBC:: Microsoft stock has worst day in two years on disappointing forecast