Microsoft Q3 profit, revenue beat estimates

The news: Microsoft beat Wall Street estimates for third-quarter revenue and profit, driven by gains from artificial intelligence adoption across its cloud services, sending the company's shares higher.

The numbers: Revenue rose 17% in the quarter ended March to USD61.9 billion ($94.9 billion), exceeding the consensus estimate of USD60.80 billion. Earnings per share of USD2.94 topped Wall Street's target of USD2.82. Microsoft shares jumped over 4% in after hours trading in New York.

The context: The tech giant’s shares have soared as it ships generative AI tools based on its strategic partnership with ChatGPT creator OpenAI, which also helped it capture the world's most valuable company crown from Apple this year. Microsoft's strong profit and revenue in third quarter offset concerns about higher-than-expected AI-fueled capital expenditures. Revenue from Microsoft's Intelligent Cloud unit, which houses the Azure cloud computing platform, rose to USD26.7 billion, passing the average estimate of $26.24 billion. The Copilot tool, a set of genAI assistants launched in November, has lifted Microsoft's enterprise software and Windows businesses. A recovery in personal computer sales was also a factor. Productivity and Business Processes, Microsoft's unit that houses office software and LinkedIn, increased revenue 12% to USD19.6 billion.