Microsoft announces earnings but its stock value plummets
The tech giant reports an increase in its revenues and profits for the last quarter, a boost it directly attributes to the expansion of its Copilot artificial intelligence platform. Despite these positive numbers, the market reaction was immediate and negative, with a massive sell-off of shares that drastically reduced its value. 📉
Copilot takes off, but Wall Street's confidence wanes
Satya Nadella, the company's CEO, highlighted the exponential progress of its AI tools. GitHub Copilot continues to add subscribers at an accelerated pace, and solutions like Dragon Copilot are beginning to operate in new sectors, such as healthcare, already surpassing the barrier of 100 million active users each month. However, analysts focused their attention on the efficiency of the massive spending required to sustain this progress.
Key points of concern for investors:- The high cost to develop and deploy AI technologies on a large scale.
- Moderate growth considered in critical segments of its cloud business.
- Doubt about whether future revenues will compensate for the huge current investments.
"On Wall Street, spending billions to build the future is a valid plan, but only if that future arrives on time and sends its bill every quarter."
The market punishes uncertainty over profitability
The stock drop, estimated at around 357 billion dollars in market capitalization, is a clear reflection of the current market mentality. These reward or punish based on future expectations, not just past results. The episode underscores the volatility of the tech sector, where even the most established giants are under constant scrutiny.
Factors behind the market reaction:- Priority of growth projections over historical achievements.
- Fear that profit margins will compress if revenues do not accelerate.
- Fierce scrutiny over every detail companies publish in their quarterly reports.
A reminder of high-tech dynamics
This financial movement serves as a powerful reminder of the rules of the game in the tech industry. Aggressively investing in innovation is essential, but shareholders' patience is limited, and they demand to see clear and consistent returns. Microsoft's path with AI, though promising, will have to demonstrate very soon that it can translate its user success into solid and sustainable profitability to calm the markets. 💼