Microsoft's hefty Copilot and AI investment reportedly built "a wall of sorry" around its earnings as investors mount profit return pressure

[Windows Central]

Microsoft is slated to report its first fiscal quarter earnings on Wednesday. Despite overall growth revenue, projections suggest the firm's AI department could report dismal Copilot Pro sales.

Microsoft's hefty Copilot and AI investment reportedly built "a wall of sorry" around its earnings as investors mount profit return pressure : Read more

 

[FraJa]

You mean Copilot for consumers, right?

Otherwise, there is no reason for any investor to be worried... and even for consumers, there have been thirteen billion chats, and twelve billion images generated on free Copilot for the web, Designer is nice too... source
Now indeed, the pro subscription for consumers, was not so appealing; however now they have rolled a big update (cf. copilot apps, or on mobile, on edge, and the iStuff have had intelligence for 18 months).
Copilot for consumers works well, but it is very consensual and was finetuned or instructed to be overly cautious... However, he tends to start writing songs or plays, this is quite nice, or speaking music gives particularly interesting results...
There is not only copilot, but there are also multiple places where AI is available in Windows already.

When you see the Microsoft 365 Business Premium (I tried it with 1 month for free), the platform is already... amazing, this allows to manage thousands of employeed, and their devices, and..... soooo much more.
And Copilot or AI is integrated everywhere, for a company, having access so easily to information is almost priceless. And it is well done.
So Clippy... and Salesforce... I can understand. Power Platform and Dynamics did not exist in 2016... now Power Platform is leading in many areas, and Salesforce, SAP, Oracle businesses arealso being challenged by MS. Just one example
They were chalengers on those markets.. very busy bank...

And anyway, Azure is used for many third party's services like AI girlfriends, SEO, Marketing, or anything...

The other day, I read Microsoft was a bank, which was one of the most ridiculous things I ever read... The company is 50 years old and innovates in all directions, hence, about 20% of growth, and this is reinvested...
FY 2024, revenue growth to $245B, up from $211B in 202. Net income rose to $88B from $72B, so profitability increased... despite spending 30B on R&D and annoucing for at least as much in new DCs...
Microsoft Cloud gross margin percentage decreased slightly to 71%.
- Revenue increased $33.2 billion or 16% driven by growth across each of our segments. Intelligent Cloud revenue increased driven by Azure. Productivity and Business Processes revenue increased driven by Office 365 Commercial. More Personal Computing revenue increased driven by Gaming.
- Operating income increased $20.9 billion or 24% driven by growth across each of our segments.

So they have +-20% of growth in revenue, In fiscal year 2024, Microsoft a profitability rate (net income margin) is approximately 35.9%, net income of $88.1B billion on total revenue of $245.1 billion.Increase from 2023 which was 34.2%.

Example of a very different company, more sitting there and collecting moneyy: 2024 Apple's total revenue reached around $385.6 billion, with a net income of $99.8 billion, leading to a net profit margin of about 25.9%

Shareholders should be happy, and here are the outlook for FY2025: FY2025

 

[naddy69]

"Microsoft's struggle to establish consumer interest in AI to drive profitability is raising investor concern."

Why do you have "Microsoft" and "consumer" in the same sentence? MS is not a consumer products company.

 

[FraJa]

They are also a consumers company... one should not think what is said *here* is what "consumers" in their majority think. Windows, Office 366 99€ for 6 peoplex5 devices and also 1to onedrive... is very very fairly priced, "alternatives" are... not the same product at all. Then Windows... never been more users. Then mobile and things like MacOs, Edge, Office, Defender but in the background they offer all the tools to manage all that, not exactly consummer oriented, but for very small businesses M365 is just unbelievable... and there you can see what is Copilot and all the AI features they have added, most aren’t about chatbots, but about making life easier, increase collaboration, reduce friction... and this js also true for organisations like schools... they have a mot of programs etc. about education, and targeting everyone... but who will write articles about all this ?? It’s positive and no one made up conspiracy theories in this area... "techies" who do not care about technology or software, they usually do not know a thing on the topics.... so fueling paranoia is selling, not reporting the reality or anything positive... shareholders worried... ahah... 20% growth, and in most of their divisions... and it's 50yo... Anyway they have 100 other lines of products that sells without involving despicable marketing that "they protect the human rights" with their iphones. then that small Xbox business, and the occasional games, they have been the most influential company in the field.. for 30 years.
And now that they have maybe more human resourves and talents even Copilot for Free has seen a big update....
So this is a very peculiar situation, tech news, and for years, but it is now the worst ot's ever been, reports what they read in tea leaves? Or what they imagine, maybe they take their info from reddit... Anyway do "news" still exist in the US when most "articles" are half made up, half defamatory... not only in tech by the way...

 

[Laura Knotek]

They are also a consumers company... one should not think what is said *here* is what "consumers" in their majority think. Windows, Office 366 99€ for 6 peoplex5 devices and also 1to onedrive... is very very fairly priced, "alternatives" are... not the same product at all. Then Windows... never been more users. Then mobile and things like MacOs, Edge, Office, Defender but in the background they offer all the tools to manage all that, not exactly consummer oriented, but for very small businesses M365 is just unbelievable... and there you can see what is Copilot and all the AI features they have added, most aren’t about chatbots, but about making life easier, increase collaboration, reduce friction... and this js also true for organisations like schools... they have a mot of programs etc. about education, and targeting everyone... but who will write articles about all this ?? It’s positive and no one made up conspiracy theories in this area... "techies" who do not care about technology or software, they usually do not know a thing on the topics.... so fueling paranoia is selling, not reporting the reality or anything positive... shareholders worried... ahah... 20% growth, and in most of their divisions... and it's 50yo... Anyway they have 100 other lines of products that sells without involving despicable marketing that "they protect the human rights" with their iphones. then that small Xbox business, and the occasional games, they have been the most influential company in the field.. for 30 years.
And now that they have maybe more human resourves and talents even Copilot for Free has seen a big update....
So this is a very peculiar situation, tech news, and for years, but it is now the worst ot's ever been, reports what they read in tea leaves? Or what they imagine, maybe they take their info from reddit... Anyway do "news" still exist in the US when most "articles" are half made up, half defamatory... not only in tech by the way...

None of these things are for consumers other than the Xbox and its games. Everything else you mentioned is for work or school.