Microsoft and Meta report increased profits in January-March quarter, with their core businesses doing well

Microsoft and Meta both reported strong financial performances in the January–March quarter, demonstrating resilience and growth in their respective core businesses despite ongoing macroeconomic uncertainties. Microsoft posted a significant increase in profits, largely driven by the continued strength of its cloud computing division, Azure, as well as sustained demand for enterprise software like Office 365 and Windows commercial products. The company’s total revenue surged, reflecting robust adoption of AI-powered tools and services that are increasingly integrated into its core offerings. Meanwhile, Meta, the parent company of Facebook, Instagram, and WhatsApp, also saw its profits rise sharply, supported by a rebound in digital advertising revenue and increased user engagement across its platforms. Meta’s advertising business, which had faced challenges in previous years due to privacy policy changes and competition, showed strong signs of recovery, with advertisers returning to its platforms as spending picked up in key sectors like retail and e-commerce. The company also benefited from improved monetization strategies, including better targeting tools and increased use of AI to personalize content and ads. In addition to advertising gains, Meta continues to invest heavily in its metaverse and artificial intelligence initiatives, though these segments remain long-term bets. Microsoft, for its part, highlighted how AI is becoming an integral part of its ecosystem, with tools like Copilot being incorporated across Microsoft 365 products, enhancing productivity for individual and business users. The company also noted growth in its LinkedIn platform and gaming division, including Xbox and related services. Both companies have emphasized the importance of artificial intelligence in driving future growth, with executives reaffirming their commitment to integrating AI at every level of their operations. Investors responded positively to the earnings announcements, sending stock prices higher as confidence grew in both companies’ ability to navigate the evolving tech landscape.

Microsoft’s CEO, Satya Nadella, emphasized the strategic importance of AI and cloud infrastructure, while Meta CEO Mark Zuckerberg pointed to the company’s AI capabilities as a key differentiator going forward. The strong earnings from these tech giants stand in contrast to more mixed results from some peers, highlighting the competitive edge that well-integrated AI and scalable platforms can provide. Additionally, both firms are managing to balance innovation with cost discipline, which is reassuring to shareholders watching for sustained profitability alongside forward-looking investments. Meta also showed progress in reducing costs through operational efficiencies, while Microsoft benefited from high-margin cloud and software segments. These earnings reflect broader industry trends, where companies that successfully combine user scale, data, and AI are pulling ahead. The results also underscore the increasing importance of business customers and enterprise solutions in the tech sector’s revenue mix, especially as consumer device sales plateau. As both companies look to the rest of the fiscal year, they remain optimistic about demand for AI products and services, signaling that future quarters could bring even greater AI-driven revenue streams. With these results, Microsoft and Meta reaffirm their status not only as tech titans but also as innovation leaders poised to shape the next wave of digital transformation. Their strong performances underscore how strategic focus on core competencies—cloud services for Microsoft, and digital advertising and social engagement for Meta—continues to yield impressive financial returns. As global enterprises accelerate their digital transformations and consumers spend more time in connected digital environments, Microsoft and Meta are well-positioned to capitalize on the growth opportunities that lie ahead.

Among these, Microsoft announced that its final profit for the three months from January to March this year increased 17% compared to the same period last year to $25.824 billion, or about 3.69 trillion yen.

This was mainly due to the strong performance of its main cloud business, Azure, against the backdrop of growing demand for generative AI.