If I Could Buy Only One Cloud Computing Stock, This Would Be It
This tech stalwart remains a compelling pick despite emerging competition.
Technology stalwart Microsoft (NASDAQ: MSFT) released impressive second-quarter fiscal 2025 financial results on Wednesday, Jan. 29, with revenue and earnings surpassing analyst consensus expectations. Revenue was up 12% year over year to $69.6 billion, while adjusted earnings per share (EPS) rose 10% year over year to $3.23.
Despite the robust performance, Microsoft's shares are down by nearly 9% since the earnings release (at the time of this writing). Investors are disappointed with weaker-than-expected revenue guidance for the third quarter of fiscal 2025. The company is also seeing a slowdown in its Azure cloud services business, triggered by capacity constraints.
And it has been hurt by the marketwide turbulence caused by the announcement of Chinese start-up DeepSeek, an artificial intelligence (AI) model with capabilities claimed to be comparable to OpenAI's GPT-4 at almost 95% lower costs. Doubts are being cast on DeepSeek's claims, but investors have also become concerned about the potential sustainability and lifetime value of Microsoft's AI investments.
