Microsoft calls for $190 billion in 2026 capital spending on soaring memory prices
Microsoft reported strong growth in AI-related revenue, reaching $37 billion annually, driven by demand for its Copilot AI tool and Azure cloud services, despite a 1% decline in its More Personal Computing division. The company highlighted increased user engagement with Copilot and a rise in commercial performance obligations to $627 billion. Leadership changes and market concerns over AI's impact on software profitability contributed to a 12% year-to-date stock decline, even as tech stocks overall rallied.
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The company now has over 20 million seats for the 365 Copilot artificial intelligence add-on for commercial Office subscriptions, up from 15 million in January. The count will be go up again in the September quarter, Hood said."Weekly engagement is now at the same level as Outlook as more and more users make Copilot a habit," CEO Satya Nadella said on the earnings call.Microsoft's More Personal Computing unit, which includes the Windows operating system, Xbox, Surface devices and Bing search advertising, contributed $13.19 billion in revenue, down 1%. StreetAccount's consensus was $12.73 billion.Sales of Windows licenses to device makers and Microsoft's own devices were down 2%. Technology industry researcher Gartner estimated that PC shipments increased by 4% during the quarter.
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