Microsoft Corp.'s impressive earnings report led to an 8% surge in stock price, pushing its market cap over $3 trillion, closely following Apple. Despite fears of slowing cloud revenue in a competitive market dominated by AWS, Microsoft's cloud and AI segments showed exceptional growth, with a 21% revenue boost in its Intelligent Cloud division. CEO Satya Nadella emphasized the importance of cloud and AI for business. However, challenges lie ahead, including increased competition and the uncertainty of AI's future financial returns, as Microsoft plans substantial investments in AI infrastructure.
Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth.
Microsoft has plans to invest $80 billion in AI data centers in fiscal year 2019.
Microsoft's real challenge lies in competing with other tech giants investing heavily in AI server farms.
The most challenging issue for investors is whether AI will provide massive financial returns in the future.
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