2 months ago
In July, Microsoft (MSFT) CEO Satya Nadella surprised AI stock investors with an uncomfortable way to think about what they were buying into.
As I wrote for TheStreet in "Microsoft CEO adds fuel to Palantir CEO's AI warning," Nadella argued that companies weren't merely paying for tokens. Moreover, they were feeding outside models the prompts, corrections, and institutional knowledge that eventually make those systems useful for their users.
"You essentially pay for intelligence twice, once with money, and again with something even more valuable," Nadella wrote in his July essay.
Days later, that warning became a central part of Palantir's bull case. Now, two months on, Palantir and Nvidia, two of the biggest names in the AI ******* e, are starting to act on it.
Palantir CEO Alex Karp pushed the argument further, which I covered in "Palantir CEO escalates Microsoft's AI warning."
#palantir #july #wrote
As I wrote for TheStreet in "Microsoft CEO adds fuel to Palantir CEO's AI warning," Nadella argued that companies weren't merely paying for tokens. Moreover, they were feeding outside models the prompts, corrections, and institutional knowledge that eventually make those systems useful for their users.
"You essentially pay for intelligence twice, once with money, and again with something even more valuable," Nadella wrote in his July essay.
Days later, that warning became a central part of Palantir's bull case. Now, two months on, Palantir and Nvidia, two of the biggest names in the AI ******* e, are starting to act on it.
Palantir CEO Alex Karp pushed the argument further, which I covered in "Palantir CEO escalates Microsoft's AI warning."
#palantir #july #wrote
2 months ago
Microsoft announced a new financial reporting structure on Wednesday, collapsing its three operating segments into two as artificial intelligence reshapes how the company organizes its business. The change takes effect in fiscal year 2027.
The two new segments are Agents and Infra, and Devices and Consumer. Those three categories — Productivity and Business Processes, Intelligent Cloud, and More Personal Computing — dated to 2015, according to CNBC.
Agents and Infra will include Azure cloud infrastructure, Microsoft 365, GitHub, productivity and server licensing, industry solutions, and frontier and support services. Devices and Consumer will cover search and advertising, Xbox, Windows operating system licenses, and device sales. The restructuring brings Microsoft's advertising businesses together under one segment, the company said.
"There's no question AI represents a profound shift in both technology and business," Chairman and Chief Executive Officer Satya Nadella wrote in the presentation. "It is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models."
As part of the changes, Microsoft will begin reporting quarterly Azure revenue figures — a disclosure it has not previously made. Under the new, narrower definition of Azure, which excludes GitHub cloud services, developer cloud services, the Security Copilot **** istant, and healthcare and life sciences cloud products, Azure revenue grew 42% to $29.42 billion in the June quarter. That compares with 43% growth under the old Azure and other cloud services metric. Azure represented roughly 33% of Microsoft's total revenue in that period.
#Services #agents
The two new segments are Agents and Infra, and Devices and Consumer. Those three categories — Productivity and Business Processes, Intelligent Cloud, and More Personal Computing — dated to 2015, according to CNBC.
Agents and Infra will include Azure cloud infrastructure, Microsoft 365, GitHub, productivity and server licensing, industry solutions, and frontier and support services. Devices and Consumer will cover search and advertising, Xbox, Windows operating system licenses, and device sales. The restructuring brings Microsoft's advertising businesses together under one segment, the company said.
"There's no question AI represents a profound shift in both technology and business," Chairman and Chief Executive Officer Satya Nadella wrote in the presentation. "It is changing what we build and how we operate, and it is blurring the boundaries between our products and reshaping our business models."
As part of the changes, Microsoft will begin reporting quarterly Azure revenue figures — a disclosure it has not previously made. Under the new, narrower definition of Azure, which excludes GitHub cloud services, developer cloud services, the Security Copilot **** istant, and healthcare and life sciences cloud products, Azure revenue grew 42% to $29.42 billion in the June quarter. That compares with 43% growth under the old Azure and other cloud services metric. Azure represented roughly 33% of Microsoft's total revenue in that period.
#Services #agents
2 months ago
Microsoft (NASDAQ: MSFT) CEO Satya Nadella has enjoyed a tremendous increase in his total compensation over the past decade, with his pay rising from just $18 million in 2015 to $96.5 million at the end of fiscal 2025. That has made him one of the world's highest-paid CEOs.
The massive jump was the result of more than 95% of Nadella's pay being directly tied to performance stock units linked to Microsoft's shares. The better Microsoft stock performs, the higher Nadella's compensation becomes.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
With Microsoft's stock surging 942% since 2015, it's no wonder Nadella's pay has accelerated. And as impressive as his pay is, the two reasons for Microsoft's growth over the past decade or so have been equally as remarkable.
When Nadella took over Microsoft in 2014, he famously shifted the company's focus to what he called a "mobile first, cloud first" approach. That meant funneling talent and capital into the company's cloud computing services, particularly Azure.
#Stock #nadella #past
The massive jump was the result of more than 95% of Nadella's pay being directly tied to performance stock units linked to Microsoft's shares. The better Microsoft stock performs, the higher Nadella's compensation becomes.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
With Microsoft's stock surging 942% since 2015, it's no wonder Nadella's pay has accelerated. And as impressive as his pay is, the two reasons for Microsoft's growth over the past decade or so have been equally as remarkable.
When Nadella took over Microsoft in 2014, he famously shifted the company's focus to what he called a "mobile first, cloud first" approach. That meant funneling talent and capital into the company's cloud computing services, particularly Azure.
#Stock #nadella #past
2 months ago
Microsoft Corporation (NASDAQ:MSFT)'s shares have witnessed a major turnaround in 2026. They are up by 2% year-to-date, primarily on the back of 23.7% gain since late July. The shares closed a strong 15.5% higher on July 30th, the day after Microsoft Corporation (NASDAQ:MSFT) reported its fiscal fourth quarter earnings. The results saw the firm beat ***** yst revenue and earnings estimates, and more importantly, its Azure cloud computing business saw revenue jump by 43% annually to beat even the most optimistic ***** yst estimates. With investors focused on AI returns, Microsoft Corporation (NASDAQ:MSFT)'s shares were rewarded. On August 17th, Cramer discussed the earnings and their impact:
"Yeah that's gutsy. I think a lot of people hanging their hat on that. Because, they do so much good work. But, of the, of the Magnificent 7, that's the one that, I think is still kind of vulnerable. After Microsoft did that tour de force conference call. The Microsoft conference call was maybe the best conference call in the quarter. Because it turned a huge cohort of people in favor of it versus against it. We didn't see that with Google and we're still waiting for it with Meta. I still believe that if Mark Zuckerberg wanted to, he could take that stock off the near 52 week low. . .and turn it around. But he needs to say, you know what, I've really thought about this. And we're going to rent out. Because we have so much demand and then they name like three companies that need some of their cloud business. I wish they could finish that thing in Louisiana."
Additionally, Microsoft Corporation (NASDAQ:MSFT) shared two key updates for its cloud computing and AI initiatives. The firm guided 45% in Azure growth for the first quarter to beat estimates. CEO Satya Nadella also remarked that Microsoft Corporation (NASDAQ:MSFT) had achieved efficiency gains of as much as 40% through using custom chips and external AI technologies. Overall, the firm's operating margin sat at 45% to fuel the bullish viewpoint of AI profitability and strong execution.Commercial bookings decelerated to 12% as CapEx jumped 35% ($13.87B), driving a 23% drop in free cash flow and signaling margin compression risks.
Commercial bookings decelerated to 12% as CapEx jumped 35% ($13.87B), driving a 23% drop in free cash flow and signaling margin compression risks.
As for Meta Platforms, Inc. (NASDAQ:META), the shares are down by 15.5% year-to-date. As is the case with MSFT, the debate for the firm is also about AI and whether the spending will yield results. However, unlike MSFT, Meta Platforms, Inc. (NASDAQ:META) does not have a cloud computing business. Therefore, all focus is on its advertising business and the tailwinds it generates courtesy of AI. Naturally, Cramer also discussed this aspect as he commented on the firm renting out cloud capacity. Overall, the firm's Q2 advertising revenue jumped by 27% while its ad impressions jumped by 14% and the firm guided as much as 17% annual growth
"Yeah that's gutsy. I think a lot of people hanging their hat on that. Because, they do so much good work. But, of the, of the Magnificent 7, that's the one that, I think is still kind of vulnerable. After Microsoft did that tour de force conference call. The Microsoft conference call was maybe the best conference call in the quarter. Because it turned a huge cohort of people in favor of it versus against it. We didn't see that with Google and we're still waiting for it with Meta. I still believe that if Mark Zuckerberg wanted to, he could take that stock off the near 52 week low. . .and turn it around. But he needs to say, you know what, I've really thought about this. And we're going to rent out. Because we have so much demand and then they name like three companies that need some of their cloud business. I wish they could finish that thing in Louisiana."
Additionally, Microsoft Corporation (NASDAQ:MSFT) shared two key updates for its cloud computing and AI initiatives. The firm guided 45% in Azure growth for the first quarter to beat estimates. CEO Satya Nadella also remarked that Microsoft Corporation (NASDAQ:MSFT) had achieved efficiency gains of as much as 40% through using custom chips and external AI technologies. Overall, the firm's operating margin sat at 45% to fuel the bullish viewpoint of AI profitability and strong execution.Commercial bookings decelerated to 12% as CapEx jumped 35% ($13.87B), driving a 23% drop in free cash flow and signaling margin compression risks.
Commercial bookings decelerated to 12% as CapEx jumped 35% ($13.87B), driving a 23% drop in free cash flow and signaling margin compression risks.
As for Meta Platforms, Inc. (NASDAQ:META), the shares are down by 15.5% year-to-date. As is the case with MSFT, the debate for the firm is also about AI and whether the spending will yield results. However, unlike MSFT, Meta Platforms, Inc. (NASDAQ:META) does not have a cloud computing business. Therefore, all focus is on its advertising business and the tailwinds it generates courtesy of AI. Naturally, Cramer also discussed this aspect as he commented on the firm renting out cloud capacity. Overall, the firm's Q2 advertising revenue jumped by 27% while its ad impressions jumped by 14% and the firm guided as much as 17% annual growth
3 months ago
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Microsoft Corp. used its fiscal fourth-quarter earnings call to deliver upbeat updates on Azure, Copilot and AI spending. But one of the company's most consequential messages for investors wasn't about cloud growth or capital expenditures — it was about the future role of AI models themselves.
Throughout the call, CEO Satya Nadella emphasized that Microsoft's AI strategy is increasingly built around model choice rather than dependence on any single AI provider. Instead of betting exclusively on OpenAI, Microsoft is building a platform where customers can mix and match models based on cost, performance and use case.
Don't Miss:
A single bad hire can set a startup back years. Here are the 5 hires founders most often misjudge — and why
#models
Microsoft Corp. used its fiscal fourth-quarter earnings call to deliver upbeat updates on Azure, Copilot and AI spending. But one of the company's most consequential messages for investors wasn't about cloud growth or capital expenditures — it was about the future role of AI models themselves.
Throughout the call, CEO Satya Nadella emphasized that Microsoft's AI strategy is increasingly built around model choice rather than dependence on any single AI provider. Instead of betting exclusively on OpenAI, Microsoft is building a platform where customers can mix and match models based on cost, performance and use case.
Don't Miss:
A single bad hire can set a startup back years. Here are the 5 hires founders most often misjudge — and why
#models
4 months ago
Microsoft's AI revenue hit a $37B annual run rate, up 123% YoY, even as shares fell 20% YTD; Palantir's Rule of 40 score reached 145%.
Microsoft CEO Satya Nadella argues that enterprises unknowingly leak proprietary know-how to whoever owns the AI learning infrastructure, making data sovereignty the defining enterprise AI concern.
Snowflake stock leads the trio as it's up 24% YTD, with product revenue growing 34% and net revenue retention at 126% as enterprises adopt its governed data layer.
Act now: the ***** yst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
Microsoft (NASDAQ:MSFT) CEO Satya Nadella published an X essay ***** led "The Reverse Information Paradox" that has become one of the most-discussed pieces of AI strategy writing of the year. His argument reframes what enterprises buy when adopting frontier AI and points investors toward companies that help customers keep data inside their own walls.
Microsoft CEO Satya Nadella argues that enterprises unknowingly leak proprietary know-how to whoever owns the AI learning infrastructure, making data sovereignty the defining enterprise AI concern.
Snowflake stock leads the trio as it's up 24% YTD, with product revenue growing 34% and net revenue retention at 126% as enterprises adopt its governed data layer.
Act now: the ***** yst who called NVIDIA in 2010 just named his top 10 AI stocks — and Microsoft didn't make the cut. Grab the names FREE today.
Microsoft (NASDAQ:MSFT) CEO Satya Nadella published an X essay ***** led "The Reverse Information Paradox" that has become one of the most-discussed pieces of AI strategy writing of the year. His argument reframes what enterprises buy when adopting frontier AI and points investors toward companies that help customers keep data inside their own walls.
4 months ago
By Aditya Soni
June 29 (Reuters) - Silicon Valley's powerful and pricey AI models have been a necessity for businesses looking to future-proof themselves. But now a growing number of tech CEOs are arguing that cheaper options would be crucial for their wider adoption.
Top executives such as Microsoft's Satya Nadella, Palo Alto Networks' Nikesh Arora and Coinbase Global's Brian Armstrong have said smaller, cheaper models can handle a big share of corporate needs.
This view is the result of a reassessment within companies that until recently encouraged heavy use of AI tools, often treating rising consumption as a proxy for productivity, dubbed "tokenmaxxing". Now, those bills are starting to bite.
Prices of tokens - the units used to measure AI usage - are falling, but the cost of completing a task is rising as AI firms shift from flat subscriptions to usage-based pricing. That is leaving companies with unpredictable and often higher bills as usage per task becomes harder to estimate.
June 29 (Reuters) - Silicon Valley's powerful and pricey AI models have been a necessity for businesses looking to future-proof themselves. But now a growing number of tech CEOs are arguing that cheaper options would be crucial for their wider adoption.
Top executives such as Microsoft's Satya Nadella, Palo Alto Networks' Nikesh Arora and Coinbase Global's Brian Armstrong have said smaller, cheaper models can handle a big share of corporate needs.
This view is the result of a reassessment within companies that until recently encouraged heavy use of AI tools, often treating rising consumption as a proxy for productivity, dubbed "tokenmaxxing". Now, those bills are starting to bite.
Prices of tokens - the units used to measure AI usage - are falling, but the cost of completing a task is rising as AI firms shift from flat subscriptions to usage-based pricing. That is leaving companies with unpredictable and often higher bills as usage per task becomes harder to estimate.
5 months ago
Many investors have been kicking Microsoft (NASDAQ: MSFT) to the curb. It's down by almost 20% year to date as fellow tech stocks continue to rally. The State Street Technology Select Sector SPDR ETF's 28% year-to-date rally truly captures how much Microsoft has fallen in the eyes of many investors.
However, it may be too early to count Microsoft out, especially since its strong fundamentals remain intact.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Perhaps some growth investors have given up on Microsoft because it's not doubling revenue year over year like some of the top-performing AI stocks. However, it's still gaining ground on its peers thanks to AI, which has translated into steady financial growth.
Revenue inched up by 18% year over year in Microsoft's fiscal 2026 third quarter. CEO Satya Nadella said the company's AI business reached an annual revenue run rate of $37 billion, a 123% year-over-year increase. Microsoft Cloud once again remained the main growth driver, and it was up by 29% year over year.
However, it may be too early to count Microsoft out, especially since its strong fundamentals remain intact.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Perhaps some growth investors have given up on Microsoft because it's not doubling revenue year over year like some of the top-performing AI stocks. However, it's still gaining ground on its peers thanks to AI, which has translated into steady financial growth.
Revenue inched up by 18% year over year in Microsoft's fiscal 2026 third quarter. CEO Satya Nadella said the company's AI business reached an annual revenue run rate of $37 billion, a 123% year-over-year increase. Microsoft Cloud once again remained the main growth driver, and it was up by 29% year over year.
