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Monday, March 27, 2017

Microsoft Is Betting Big on Artificial Intelligence | GuruFocus

Photo: Naman Shukla
"Company's Azure platform will continue to be a key revenue driver in the forthcoming year." reports Naman Shukla, GuruFocus Contributor. 

Microsoft (NASDAQ:MSFT) ended 2016 in the green, up more than 10%. Moreover, the stock is off to a good start this year, with a 5% rise year to date. As a matter of fact, the company’s upward movement started in early 2013. Since then, it has continued rewarding investors every year.

Microsoft reported second-quarter results in January. The company detailed earnings per share of 83 cents, exceeding analysts' estimate by 4 cents. The company's revenue came in at $26 billion, again exceeding analysts' estimate by $790 million. Moreover, that represents growth 4% compared to a 3% decilne in the same quarter of the previous fiscal year.

According to a report from marketsandmarkets.com, the artificial intelligence market is projected to reach $16.06 billion by 2022, a compound annual growth rate of approximately 63%. Keeping in mind the positive outlook, the company is making several smart moves to gain huge benefits from this trend.

Recently, the tech giant acquired Maluuba, a Canadian startup focused on natural language processing technology. As per the latest report from Synergy Research Group, Amazon (AMZN) holds the leading position in the public cloud market with approximately 40% worldwide revenue market share, significantly greater than Microsoft (NASDAQ:MSFT), IBM (IBM) and Google (GOOGL) combined.

Naman Shukla ends his article with the following conclusion: "Throughout the past few years, Microsoft has been performing amazingly well. Furthermore, its cloud platform looks well-poised to grow at a rapid pace in the years ahead. In the prior quarter, the revenue generated from Azure surged 95%."

With time, Microsoft appears set to to swiftly expand its portfolio of data and artificial intelligence abilities in Azure. The company has also made a smart move by launching Connected Vehicle Platform, as it will further strengthen its Azure platform.

Currently, Microsoft sits at a second position in the cloud market, and it is highly likely that its market share will continue surging in the years ahead.

Source: GuruFocus


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