MSFT

<p>AI business growth is significant, capital expenditure exceeds expectations. However, this quarter's total revenue growth rate decreased by 1.8% year-on-year, and new signed orders also declined by 12%</p>

- Microsoft's 2024Q2 revenue and profit align with expectations, with notable growth in AI business contributing $16.83 billion to cloud revenue, up 26% QoQ. However, overall revenue growth declined by 1.8 percentage points due to lower European demand and data center capacity constraints.
- Capital expenditure significantly exceeded expectations, reflecting confidence in AI business growth, with cloud and AI-related expenses driving the increase. The three main business sectors met revenue expectations, with AI's share in cloud revenue and revenue proportion continuing to rise.
- Despite AI growth, Azure's YoY growth rate decreased this quarter, attributed to lower European growth and infrastructure constraints. Concerns arise as new business orders grew only 17% YoY, down 12% from the previous quarter, prompting worries about demand fluctuations.

Microsoft's AI Bet: Massive Investment and Growth Challenges