Microsoft reported Q2 2025 revenue of $69.6 billion, marking a 12% increase from the previous year, driven by robust AI service growth. However, CEO Satya Nadella and CFO Amy Hood highlighted challenges in AI execution and a slight drop in cloud service demand. Cloud revenue rose 21% year-on-year, but Azure's performance fell short of expectations due to execution issues. The company also faces constraints in AI capacity, despite a year-on-year revenue increase of 157%. Looking ahead, Microsoft projected lower than expected revenue forecasts for the next quarter, leading to slight share declines.
"Microsoft's latest earnings results exceeded expectations, yet comments from CEO Satya Nadella and CFO Amy Hood signaled turbulence in AI and execution, alongside signs of waning cloud demand."
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