Microsoft's Q2 Earnings Amid DeepSeek's AI Impact on Tech Titans
Earnings Report:
- Microsoft (MSFT) reports second-quarter earnings on Wednesday after market close.
Wall Street Expectations:
- Consensus EPS: $3.13
- Revenue: $68.8 billion
Key Metrics to Watch:
- Commercial Cloud Segment Revenue: Expected at $41.1 billion, up from $31.9 billion in Q2 2022.
- Intelligent Cloud Business Revenue: Projected at $25.8 billion, higher than $21.5 billion in the previous quarter.
Impact of DeepSeek's AI Model:
- China's DeepSeek's cost-effective R1 AI model has challenged the industry's reliance on expensive chips for AI development.
- Microsoft's AI investments are under scrutiny to demonstrate their value and infrastructure necessity.
Azure Growth Forecast:
- Jefferies analyst Brent Thill anticipates Azure growth to accelerate in the second half of 2025.
- Microsoft's Azure platform benefits from a recent commitment from OpenAI for support and training.
Stock Performance and Analyst Outlook:
- Microsoft's stock has lagged rivals (AMZN, GOOG) despite its AI investments.
- Evercore ISI analyst Kirk Materne predicts a "mini revenge trade" as AI sales increase and capital expenditure moderates.
Copilot+ PC Lineup:
- Microsoft aims to boost PC sales with Copilot+ AI-powered PCs.
- The potential benefits of AI PCs in real-world scenarios remain to be seen.
More Information:
- For comprehensive earnings coverage and analysis, visit Yahoo Finance.
- Email Daniel Howley at [email protected] for inquiries.