Microsoft is set to report its upcoming earnings, and the potential for disappointment is high. However, Jim Jubak sees potential opportunities in the company’s cloud business, Azure, and its investments in AI technology.
Slowdown in Azure Revenue Growth
Azure has seen a decline in revenue growth over the past year. The growth rate dropped from 50% in September 2021 to 35% in September 2022. Wall Street analysts expect a further decrease to 33% by March 2023. If these predictions are accurate, Microsoft stock could suffer as a result.
Potential for Growth in AI Sector
Jim Jubak believes there is still hope for Microsoft due to its investments into AI technology like Chat GPT and Dall-E-2. OpenAI developed Chat GPT which has the potential to replace Google search; Dall-E-2 creates images from natural language queries; and Codex Natural Language creates code from natural language queries.
Enhancing Microsoft Suite with Chat GPT
By incorporating Chat GPT into the Microsoft Suite of software such as spreadsheets, coding programs, videos, imaging software, and Word processing software; Microsoft can increase their revenue without disrupting the search engine market. This could provide an immediate boost to their profits with minimal disruption or effort required on their part.
Conclusion
To sum up Jim Jubak’s thoughts on Microsoft’s current state: he believes that they are well positioned to take advantage of the ongoing AI revolution and that adding Chat GPT into their existing suite of software will result in an immediate increase in revenue for them. If you’d like more information or analysis on other stocks visit JubakPicks.com or JubakAM.com
