Microsoft's latest financial report shows that revenue in the first quarter of fiscal year 2025 (FY25Q1) reached US$65.59 billion, a year-on-year increase of 16%, exceeding market expectations; net profit was US$24.67 billion, and earnings per share were US$3.30, also higher than US$2.99 ​​in the same period last year.

However, despite the strong financial report, the stock price only rose slightly by 0.7%, indicating that the market continues to wait and see its growth trend.

Microsoft has recently shifted its focus to the field of artificial intelligence (AI) to consolidate its leading position in the technology industry and enhance future growth potential. Google's parent company Alphabet (GOOGL) also released a report on the significant return on investment in AI the day before yesterday, further increasing the competitive pressure on Microsoft.

As the cost of AI increases, investors are concerned about whether benefits can be achieved in the short term. Microsoft needs to prove the value of AI applications and maintain the growth curve, which will be the key to its market leadership.

One of Microsoft's major advantages in the AI ​​competition comes from its exclusive cooperation with OpenAI, which enables Azure customers to use OpenAI's latest models first and expand them to products such as Bing and Excel.

As AI applications deepen, Microsoft's product lines, from Office suites to enterprise applications, have introduced AI features, especially the newly launched 365 Copilot and other applications. In addition, its productivity division and personal computing division (including Windows and Xbox) generated revenue of $28.3 billion and $13.2 billion respectively in the first quarter.

This quarter, Microsoft reorganized its business reporting model for the first time, which made it more difficult for the outside world to evaluate its performance. Although the company's performance has exceeded market expectations, Microsoft still faces pressure from cloud competitors such as Amazon (AMZN) and Google (GOOGL), especially in the context of slowing cloud growth.

Recently, Google's cloud revenue has increased by 35%, and has benefited from the promotion of AI technology, while Meta (META) has also significantly increased its spending on AI infrastructure, showing that technology giants have increased their investment in AI to meet market demand.