My biggest impressions from the article
Microsoft shares slid about 10% on Thursday following an earnings report that disappointed some investors, prompting the stock’s sharpest daily decline since March 2020.
Microsoft’s finance chief, Amy Hood, argued that the cloud result could have been higher if it had allocated more data center infrastructure to customers rather than prioritizing its in-house needs.
“If I had taken the GPUs that just came online in Q1 and Q2 in terms of GPUs and allocated them all to Azure, the KPI would have been over 40,” she said.
Analyst Ben Reitzes of Melius Research, with a buy rating on Microsoft stock, said during CNBC’s “Squawk on the Street” on Thursday that Microsoft should double down on data center construction.
“I think that there’s an execution issue here with Azure, where they need to literally stand up buildings a little faster,” he said.
LMAO, the analysts and C level execs are going to accelerate the fall of Micro$lop.
Microsoft’s finance chief, Amy Hood, argued that the cloud result could have been higher if it had allocated more data center infrastructure to customers rather than prioritizing its in-house needs.
This is 98% chance a lie. Refusing azure clients wasn’t happening. They are saying the dedicated GPUs to copilot 365/windows/bing, but they would just slow tokens/second delivery or raise prices if they were constrained. Open AI/copilot service is flattening out is the far more likely explanation, and China/Anthropic/Google gaining share is apparent with frontend and LLM innovation.
That said, windows 11 copilot is going at about 7tps on simple queries about its QOS, and slow service of paid models could impact azure. In Nov 25, they did drop big customer volume discounts. There were big price increases earlier in the year, so growth was in part pricing growth, and likely a drop in usage volume from previous quarter, or at least very stable. The AI frenzy, mostly openAI/msft/oracle/coreweave block of absurdly impossible capacity growth depends on keeping up with supposedly massive (token) demand growth. There are still a lot of free alternatives in the space, and app download figures usually accompany free promotional usage of latest breakthrough model (sora2 was free use on release. kilo code this week has free Kimi K2.5. Other coding tools have fully free or generous free tiers)
Overall, this, and highly promotional industry, means its very hard for datacenter/LLMs to meet the hype. Deepseek 4 is hyped as a big leap forward, to be released in a couple of weeks. Everything AI boom is likely a lie, and Nvidia bribing Trump to sell H200s to China, at 25% export tariff, is proof of incapacity or unwillingness of US industry to deploy them.
Everything AI boom is likely a lie, and Nvidia bribing Trump to sell H200s to China, at 25% export tariff, is proof of incapacity or unwillingness of US industry to deploy them.
I’d love for you to be right (I’d like to see nvidia compete as an underdog since they are fairly anticompetitive in their dominant position) but think this reasoning is flawed.
Wanting to sell to China just means that demand isn’t exceeding supply, or maybe even that they have access to more supply that they’d use if they could sell to China, which is a massive market. Or even if they don’t have any excess supply, higher demand means they can set higher prices and still expect to sell all inventory.
Like the US car companies wanting to sell cars in China doesn’t imply that they are unable to sell cars in the US, it just means they want to sell cars to China and the US.
I agree with the rest of your comment and think it was well said, sorry about this nitpick.
god this is the newest product name. You have Office365 and now AI357!
AI357 as in I’d rather eat a .357? Impeccable marketing
Microslop is allergic to good or descriptive product names
Attending those meetings must be soul crushing. The entire point of the call is to take advantage of your customers more, get more money out of them, and get more wasteful data centers built.
WE DON’T WANT DATA CENTERS, WE HATE THEM.
I hope AI dies a fast and painful death and the PC world can get back to normal.
I hope so, too. However when AI dies nothing will go back to normal. I have been waiting for things to go back to normal since the GPU shortage from the bitcoin shambles. Christ, I’m still using a 980ti and have given up buying new games (which, ironically, probably saved me enough money to buy a top line GPU)
They will find another way to manufacture some shortage or another to bump up the prices and gouge gouge gouge.
Do you mean that Windows Copilot AI Extra Spyware Edition wasn’t a smashing success, despite literally everyone who isn’t a buzzword-spouting CEO telling them this would happen for like a fucking year?
Please die
I’m still on the fence as to whether their current CEO is just a complete business illiterate, or some kind of corporate Manchurian candidate… It’s sure LOOKS like malicious mismanagement to me, a nobody pleb.
I initially thought he was great. Their cloud business was booming, it looked like they were converging their tools, windows 10 had its flaws but was pretty good. But now the tools are an enormous mess because they have changed their minds 5 times over, Windows 11 is complete dogshit and all the tools that are actually handy are paywalled behind expensive licences. Copilot is being forcefed to unwilling users and every single one of their tools is becoming worse.
So yea, I think he’s a business illiterate because there is no strategy behind this mess.
It’s actually insane how much money these companies have.
Ehhh…that’s their market capitalization, not their cash on hand.
The market capitalization is just what the company is worth, based on what investors are currently willing to pay for ownership of shares in the company.
EDIT: Here’s Microsoft’s cash on hand:
https://www.macrotrends.net/stocks/charts/MSFT/microsoft/cash-on-hand
Looks like about $100 billion.
They can turn their market cap into liquid cash by borrowing against it. They can also pay directly in stock. E.g. how some pay their employees with more stock than salary. They can use their stock to buy other firms. The stock price and therefore market cap is not just an abstract number.
“If I had taken the GPUs that just came online in Q1 and Q2 in terms of GPUs and allocated them all to Azure, the KPI would have been over 40,” she said.
“If I had bet on black instead of red I would have won”
I think she’s saying she could have allocated the GPUs to Azure to game the metrics, but Microsoft chose to allocate them to internal projects, which is a form of self-investment. She’s not saying they made the wrong decision, she’s saying their decision in this longer-term investment makes the short-term metrics worse.
If ifs and butts were candy and nuts we’d all have a merry Christmas.
Glad to finally see some uplifting news this month.
Microsoft should double down on data center construction.
Yes, Microsoft should invest big in hardware!
Might’ve been partly because of the Melania movie’s generation and how weak, unsmart and unwise it makes Apple look.
$357 billion is between the total GDPs of Finland and Sri Lanka
Oh no. Anyway…
Make Windows 7 again (or just use Linux), ditch AI, value your users. Sack the CEO. Pretty simple.
Or double down on AI. Then double down even harder.
- Make the use of Copilot mandatory; simultaneously heavily monetize it to instantly turn the AI division into a profit center.
- To that end release the successor to Windows 11, a cloud-only offering that replaces the taskbar with a Copilot instance which launches programs for the user. Downplay any accusations that the new Windows Live 365 With Copilot is just a rental Windows 11 with the taskbar hastily hacked out.
- Don’t forget that Windows Live 365 With Copilot does not include a subscription for Copilot, which must be booked separately.
- Get all of your customers to switch by immediately dropping support for all previous Windows versions, “migrating” their support windows over to Windows Live 365 With Copilot. Corporate customers, which have gone all-in on Azure, will need years to migrate off the Windows ecosystem, which means excellent short-term revenue.
- Make sure that Windows Live 365 With Copilot can only save to OneDrive to make it maximally hard for those customers to get their data out.
- Hope that the current world order disintegrates before the massive exodus of customers ruins the company.
- Whether or not it does, turn off your business phone and spend the next five years doing massive amounts of cocaine on a private island in the South Pacific.
A business plan to rally the crowds behind 💸
Solid business plan. Would implement
I wonder how well a project to secure windows 7 and provide 3rd party security patches would do financially. Whichever country grows the balls to ignore the DMCA could do it and make a lot of people happy.
Very few people would use it. You’d have all the issues of Linux where very little is made for the OS, so community made ports would be the only way to get things running. Those downsides are counteracted by the upside of Windows… which is what?
Their core users are corporations, not personal households.
Depends on your definition of “users”. If “user” means “source of personal information to train AI models” then households absolutely are users. I guess we’re entering a world where different users do different things for a company like Microsoft: Corporations buy licenses for OS and software, households and individuals provide data to train the AI models that permeate it all.
This would be great, but unfortunately would not make number go up. That is all they care about now.
I dunno. Windows 11 sales have been crap. People aren’t buying new machines due to it. Relaunch 12 as privacy focussed, AI enabled (but optional), and they could see a bounce. Double down on Office, keep a steady improvement on Azure, and see Xbox as a growth opportunity. Microsoft could avoid the AI slump
Notice how Apple have not jumped all in. They are anticipating the storm and are well prepared to weather it out
Windows 11 sales have been crap. People aren’t buying new machines due to it.
Wait until new computers quadruple in price because of data center demands, driven by idiotic AI initiatives nobody wants, and nobody buys new computers.
Apple did jump in but then backed out once it was clear their offering wasn’t even close to the competition. Remember their big push on Apple Intelligence and how most of the features they promised never materialised?
While the back-peddalling was embarrassing at the time, I agree that their cautious approach since will probably work out better than Microsoft going forward.
If I had to guess, at least in the past, Apple has typically listened to its engineers. Maybe not as well as like Valve.
If I had to guess, at least in the past, Apple has typically listened to its engineers.
Fair.
Windows & Xbox are like 16% of M$'s revenue, they’re not that important to the company.
Exactly, both are under performing. New CEO should be fixing that
But they don’t give a shit about them, they cater to companies first and foremost.
Companies care about Windows for sure
They care that they’re running it.
Past that, they don’t care.
The reality is, and I say this with a heavy heart, that Crapple is ahead of everyone else in how to keep the money and stock prices moving in their favor. They ‘rent’ AI capabilities from OpenAI and Google and put their money where they always have, making new devices, some good developing and fucking over everyone in their walled garden. Microslop, on the other hand, has completely lost its north.
Full disclosure, I fucking hate Crapple almost as much as I hate Microslop, but they evidently know what they’re doing. How long they can keep their shit up is another conversation for another time.
They are running their own schemes as of right now.
Sorry you’re right, number MUST GO UP /s.
sigh.
8 was better than 7.
No. 8.1 maybe. But not 8
Both because of Metro, unless there’s a back port to 7 there’s no reason to use 7.
I remember 8 being a cluster fuck. But 8.1 was ok.
I had a windows phone at the time. Those were great.
I need those dumbasses to increase their sales for my investments.
Come on you stupid Satya, do something.
If you’re investing money in dumbasses, what does that make you?
I don’t know. Their stupid company is in my s&p500 etf.
Can’t they be as profitable as Nvidia?
Writing this from Linux which I installed last fall in lieu of the Windows 11 update.
I’m still using both OS via dual boot, and I still have some unresolved issues on Linux, but I will fully transition during the course of this year.
One thing that is really mind-blowing is the difference in performance on my ~7 y/o laptop. My Linux Mint is just lightning fast compared to Windows 10. You can quite literally feel how Windows runs a thousand random things in the background (most of which I never asked for) whereas Linux feels very clean and… empty, but in a good way.Not sticking up for Microsoft, but when you first setup a Windows machine, all those metrics toggled on like advertising and keyboard or handwriting usage, etc, I turn all 6 of those off. One in Windows I now uninstall Copilot and disable stuff like phone link, OneDrive, and pretty much every application from running at startup ( Adobe if needed, etc)
This is just for work, but I can usually get away with lower spec machines by curating what’s allowed to run by default.
Nice! I love reading about people ditching winblows. next thing you’ll know, you’ll be distrohopping in no time. :)
Ain’t that the truth? I feel like Distro hopping is an integral part of falling in love with Linux. In my case, I get distro hopping zoomies every few months 🤣
