Microsoft’s AI business reaches $37 billion annual revenue run rate, but soaring capital expenditures weigh on shares year-to-date.
Microsoft’s AI business surpassed a $37 billion annual revenue run rate, growing 123% year-over-year, while Intelligent Cloud revenue rose 30% to $34.681 billion. Azure cloud growth accelerated to 40%, yet shares fell 12.74% year-to-date amid investor concerns over rising costs.
Quarterly capital expenditures surged 84.39% to $30.876 billion, and OpenAI investment losses widened to $3.1 billion. The company’s forward earnings multiple stands at 22x, reflecting skepticism about AI-driven returns despite strong revenue growth.
Shares traded at $421.06, down from earlier highs, as markets weigh the balance between AI expansion and near-term profitability pressures.