Microsoft Q4 Earnings: Copilot Assistant has significantly boosted productivity

After the US stock market closed on July 31, Microsoft released its financial results for the fourth quarter of fiscal year 2024 (second quarter of calendar year 2024). The market's attention was primarily focused on slower-than-expected revenue growth in its cloud business, higher-than-expected capital expenditures, leading to visible disappointment among investors.

However, Microsoft's overall business remains robust. The slowdown in Azure cloud revenue growth was due to objective factors and not issues within the business itself. Firstly, in June, growth in some European regions was slightly below expectations, driven by macroeconomic factors specific to those regions and unrelated to Azure's business. Secondly, constraints in data center capacity necessitated Microsoft to accelerate expansion through agreements with third parties.

The substantial investments in AI are expected to take at least 15 years to achieve commercialization, but they are deemed worthwhile.

Microsoft's Copilot Assistant has significantly boosted productivity, with increases observed in both the number of paying users and their average spending.

Blizzard has brought Microsoft a wealth of gaming IPs, enabling potential increases in subscription service revenue and driving long-term value growth in the gaming business.

LinkedIn continues to accelerate its membership growth, gaining market share for the past two years.

Integrating AI into Bing search and Edge browsers has increased their market share.

Windows OEM revenue is steadily growing, roughly in line with the PC market, with no strong signs yet of a robust recovery in the AI-powered PC market.