Quarterly figures from Microsoft and Google parent Alphabet show substantial year-on-year growth in cloud revenue. The tech giants posted 29 percent and 22.5 percent growth in revenue from their cloud operations, respectively.
Microsoft’s Intelligent Cloud division, which includes Azure, came in at $24.3 billion, or nearly €23 billion, last quarter. The growth exceeded the expectations of analysts, who expected an increase of 26.2 percent.
Google managed to generate revenues of $8.41 billion in three months with its cloud division. That is lower than investors’ expectations, who thought Google Cloud would end up with revenue of $8.62 billion. Although growth is still more than 22 percent, Google Cloud is now experiencing its slowest growth in 11 quarters.
Market reaction and whole numbers
The financial figures caused varying effects on Microsoft and Alphabet shares. After trading, shares of Alphabet were down 7 percent, while Alphabet did exceed complete analyst expectations. The complete analyst expectation includes, for example, ad revenue, something from which Google generates much of its revenue. Microsoft, on the other hand, saw its stock price rise 5 percent.
Alphabet managed to generate a total of $76.69 billion in revenue in three months, representing a year-over-year growth of 11 percent. The tech giant also posted a profit of $19.69 billion. Microsoft’s revenue was 13 percent higher, totaling $56.5 billion. Profits were $22.3 billion, representing year-on-year growth of 27 percent.
In recent months, Microsoft and Alphabet took steps with mass layoffs and investments in AI. In any case, last quarter’s figures show that the strategy is currently working out well financially.
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