A sell-off in AI-linked stocks this week and recent advances in the field by Chinese start-up DeepSeek will make artificial intelligence an area that investors will be watching for as Microsoft reports results.
DeepSeek’s R1 model triggered a dramatic sell-off in tech stocks on Monday and raised doubts over whether Microsoft’s $80bn spend on AI infrastructure this year was warranted.
In a similar vein, Microsoft has also bet $13bn on the generative AI start-up OpenAI, mostly in the form of cloud compute capacity. Analysts are eager for signs that the arrangement will start to lift the tech giant’s revenue.
Also important are growth rates at Azure, Microsoft’s cloud computing business. The company attributed some “short-term constraints” there during the previous quarter to third-party suppliers. Investors will look for detail on whether the company has been able to boost capacity to meet demand.
Additionally, investors will listen in for discussion about TikTok. US President Donald Trump told reporters on Monday that Microsoft was one party interested in buying the social media app. The company has declined to comment, but questions around a potential deal could be hard to avoid.
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