Ming-Chi Kuo released a market research briefing today, analyzing Microsoft’s financial report data for the first fiscal quarter of fiscal year 2024 (the third quarter of this year). He believes that from the perspective of capital expenditures, Microsoft’s investment focus on AI has already From allocating computing power, we gradually shift to application and business development.
Ming-Chi Kuo analyzed Microsoft’s financial report data and said that the company’s capital expenditures have slowed down significantly and are lower than the growth of Nvidia’s CoWoS AI chip shipments. This shows that Microsoft’s investment focus on AI has shifted and it has begun to pay more attention to how to profit from AI.
Microsoft’s biggest revenue growth in the first quarter still comes from cloud investment, including Microsoft Azure in the Intelligent Cloud division to achieve revenue of $24.3 billion, up 19%. Azure server products and cloud services grew 21%, while all other cloud services grew 28%, at constant exchange rates of 26%. Azure server products and cloud services grew 21%, while all other cloud services grew 28%, or 26% at constant currency.
While the market might intuitively attribute Azure’s revenue growth to AI services, Kuo believes a more critical driver of revenue was Azure’s enterprise customer portfolio, especially large enterprises, which helped mitigate the impact of the economic slowdown on Azure.
Kuo believes that Microsoft’s capex may no longer be the main catalyst for AI supply chain stocks for the foreseeable future, but that the company’s AI business could benefit from long-term AI server shipment growth (with more demand coming from competitors, small- and medium-sized CSPs, and enterprise datacenters) and investment confidence if its contribution to the company continues to grow, as suggested by the earnings estimates.
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