Focus on the cloud

Microsoft's financial success is increasingly tied to its cloud services unit, constituting 55% of total revenue, or $65.5 billion out of $118.5 billion generated between July and December 2023.

The chart below reveals a growing share of cloud-related sales in Microsoft's revenue composition, rising from 41% in July-December 2021 to 46% in the same period in 2022.

The doubling of cloud revenue over that period is attributed to Microsoft's enhanced partnership with OpenAI and a $13 billion investment, aiming to integrate the GPT-4 language model into various products.

This collaboration positions Microsoft's Azure cloud revenue as a crucial pillar in the company's future, aligning with the industry's broader shift towards cloud solutions.

Estimates project $679 billion in user spending on public cloud services in 2024, with Microsoft Azure, Amazon's AWS, and Google Cloud being key players in this market. We're happy that we have all three in our model portfolio.

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