The results, which solidly beat analyst expectations, drove Microsoft’s share price more than 5% higher in after-hours trading.
All eyes will be on what the company says about its outlook for the future in a call with analysts, with worries high that US multinationals could suffer due to the high tariff policies of President Donald Trump’s administration.
Microsoft has remained more discreet in its support for Trump than its rivals, many of which contributed money to the president’s inauguration fund and announced major investments in the US.
Microsoft, which celebrates its 50th anniversary this year, saw net profits climb 18% to US$25.8 billion, compared to the same period last year.
Crucially, Microsoft Cloud revenue reached US$42.4 billion, growing 20% year-over-year, which chief financial officer Amy Hood attributed to “continued demand for our differentiated offerings.”
Microsoft was one of the first tech giants to double down on artificial intelligence when the launch of ChatGPT in 2022 rocked the tech industry.
Like its rivals, it has spent massively on building the infrastructure necessary to power the AI revolution, with analysts keeping a close eye on the return on investment.
The company in January said it was on track to pump about US$80 billion into artificial intelligence this fiscal year.
Microsoft this quarter said its relationship with ChatGPT creator OpenAI was evolving and that it would no longer be the exclusive provider of the startup’s colossal computing needs.
It has been a major backer of OpenAI, mainly by providing the heavy computing capacity required to build AI models.
The company’s Intelligent Cloud segment, a key part of Microsoft’s business, showed particularly strong growth with revenue of US$26.8 billion, up 21%.
Its Azure and other cloud services revenue surged 33%, reflecting the increasing adoption of Microsoft’s cloud platforms.
The Productivity and Business Processes division, which includes Office 365 and LinkedIn, generated US$29.9 billion in revenue, a 10% increase.
The company said it returned US$9.7 billion to shareholders through dividends and share repurchases during the quarter.