Azure’s Revenue Growth and Generative AI

• Microsoft reported earnings results this evening. Despite MSFT’s AI-related rhetoric, I don’t see Generative AI as a significant near-to-intermediate-term Revenue driver.

• Azure’s constant currency growth rate was essentially flat at 28%. I expect that Azure’s growth rate will slow as we move through the December quarter into calendar 2024.

• Our chart below plots Azure’s year-over-year constant currency growth rate. The chart does not adjust for tuck-in acquisitions such as Microsoft’s January 2023 acquisition of Fungible for $190 million.

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