“Write a newsletter about Microsoft’s second quarter 2023 earnings.”
This is what ChatGPT can do for you if you want to create an in-depth article. microsoftof (NASDAQ:MSFTMore) second-quarter earnings released on Tuesday.
ChatGPT is an artificial intelligence (AI) is basically a chatbot that can be thought of as a “language machine”. ChatGPT, which stands for “chat generative pre-trained Transformer”, is a text engine that can create anything from solving math problems to writing book reports. And it’s easy to use. After visiting the chatbot’s public website and creating an account, simply type your question into the search bar and get the answer.
And folks, I tested it too. When asked to introduce themselves, the AI chatbot said:
OpenAI, developer of ChatGPT, is a non-profit AI research company. We launched our chatbot last November and it was a huge success. In his first week, ChatGPT had over 1 million users, and in December he reached 21 million. It is now seen as a paradigm for how pervasive and impactful AI-generated content can be.
then today Market 360 Rest assured, this was not written by an AI. Let’s dig into Microsoft’s partnership with OpenAI, then check out the company’s second quarter earnings.
Microsoft first partnered with OpenAI in July 2019. Microsoft invested his $1 billion in research firm and its cloud service Azure became OpenAI’s exclusive cloud provider. The plan for both companies was to build AI that could solve more complex tasks, such as “more personalized healthcare and education.”
Microsoft invested in OpenAI again in 2021. Third time last Monday. Microsoft announced his new $10 billion multi-year deal with ChatGPT maker. This new partnership could pave the way for Microsoft to incorporate chatbot AI into applications such as Word, PowerPoint and Outlook.
However, the partnership will cost more than billions of dollars. Microsoft announced last week that he plans to lay off 10,000 employees as part of cost-cutting measures.
Additionally, ChatGPT is not foolproof. May provide inaccurate information or biased answers about issues. Also, at least for now, we can only provide users with information prior to 2021. Because 2021 is the year training stopped.
In fact, I also asked ChatGPT the question I started here. What were Microsoft’s second quarter revenues?
Take a look at Microsoft’s earnings
So what exactly were Microsoft’s second quarter results?
Microsoft reported earnings of $2.32 per share, down 7% from $2.48 a year earlier, but beating analyst expectations of $2.29 per share. Earnings of $52.75 billion were up slightly from his $51.73 billion the year before, but fell short of analyst estimates of his $52.94 billion. Microsoft’s cloud business grew 18% year over year to $21.51 billion, beating analysts’ expectations of $21.44 billion. Total revenue increased by 2%, the slowest pace since 2016.
The stock climbed 4% in after-hours trading, where earnings and cloud earnings were beaten on Tuesday, but that changed after the company announced poor forward-looking guidance.
Microsoft forecasts third-quarter revenue of $50.5 billion to $51.5 billion, which could be down 4% from the second quarter, but analysts forecast revenue of $52.43 billion. I’m here. Earnings per share are projected to be $2.32, up from $2.22 a year ago, but flat from the second quarter.
However, the company’s management remains optimistic about the company’s future, saying in a statement:
The age of AI is here, and Microsoft is pushing it. We have the most powerful AI supercomputing infrastructure in the cloud. It is used by customers and partners such as OpenAI to train state-of-the-art models and services such as ChatGPT.
And Microsoft is getting another partner in AI. NVIDIA Corporation (Nasdaq:NVDA).
Last November, NVIDIA announced a multi-year partnership with Microsoft to build “one of the world’s most powerful AI computers.” NVDIA is a leading computer graphics company that manufactures consumer and enterprise graphics processing units (GPUs). From video games to professional visualization to data center to automotive applications, NVIDIA graphics cards give your computer more processing power.
Chip makers are key to many AI innovations, and NVIDIA is now at the forefront of helping develop self-driving cars.
For example, Foxconn, which makes the iPhone, has been praised for its AI platform that helps build cars. In fact, NVIDIA’s AI platform is used to build his Foxconn vehicles, and its chips are used in all Mercedes systems. Essentially, NVIDIA is the pioneer and leader in autonomous driving. Tesla Inc. (Nasdaq:TSLA).
The Tesla system uses cameras. NVIDIA systems use cameras, but specifically LIDAR. Now, what is LIDAR? Forward infrared radar. This is what the military uses to launch missiles through smoke, rain, etc. so that the missiles are accurate.
I want to see animals at night, so whenever I order a car in the West, I always order a LIDAR system. If the infrared senses an animal, it will stop the vehicle. Tesla has moved away from LIDAR, so if Tesla gets into heavy rain, sleet, snow, ice, fog, or smoke, the system won’t work.
In short, NVIDIA is the leader in AI and graphics chips.
In terms of fundamentals, the company is expected to release its fourth quarter earnings for fiscal 2023 on February 22nd. Earnings are expected to decline 38.6% year-over-year to $1.32 per share from $1.32 per share. It is projected to decline 21.4% year-on-year to $6.01 billion. However, the analyst community has revised its fourth quarter earnings forecast upwards in the last three months. This is always a positive sign.
NVIDIA has been one of my favorite stocks for years. growth investor Dating back to May 2019. Having recently stayed at a D rating on the Portfolio Grader, he was upgraded to a C rating over the weekend, a sign of growing institutional interest in the stock. We’ll get a better pulse on the company’s fundamentals after the fourth quarter results and guidance are out, but I think that’s the better AI bet at this point.
That said, given the C rating on the Portfolio Grader, I wouldn’t add any new capital to the stock just yet. Microsoft, on the other hand, holds a D rating on the Portfolio Grader and is a ‘sell’. Given the company’s mixed earnings and sluggish share price, I don’t think it will be upgraded to a B rating (“Buy”) any time soon.
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