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.
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.
It’s not just an abstract number, but leveraging it changes the value. If they hypothetically tried to leverage 2 trillion with of their stock, it wouldn’t be worth 2 trillion.
Of course the needle would probably barely move if they tried to leverage 50 billion.
Exactly. They can’t get anything they want out of it but they can get a lot. Especially if it’s moving upwards.
Only $100 billion? That’s like nothing!
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?
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.
The story I’ve heard is that he took a nosedive in effectiveness as CEO when his son died in 2022 (https://www.nbcnews.com/news/us-news/microsoft-ceo-satya-nadellas-son-dead-26-company-says-rcna18320). No idea how true that is, but 2022ish does seem to have been a turning point for Microsoft in terms of strategy and how well the company is run.
That’s sad. Regardless of whether it’s one of the reasons for Microsoft’s nosedive, it does make me feel some unexpected sympathy for Satya Nadella. I also feel pity, because most high up CEOs do not seem happy with their lives — Many of them spend an absurd amount of time at work, even if they never seem to actually do much work, and I can’t imagine how hard it must be to weather grief under such conditions. No amount of money can buy you more time with a lost loved one.
It really seems like a hollow existence.
Please die
Microsoft has really messed up quite spectacularly. 5 years ago I would never have even considered switching to another OS (especially for a daily driver).
Yet here I am, using LINUX! My experience with Linux has gone from the perception of it as a scary figure, a ghost looming around me that I was trying to ignore. But now, I’m realizing that Linux is more like Casper. Linux is a friendly ghost. So while I still may not know how to totally deal with cohabitating with a ghost, at least it’s friendly, in theory.
But in less obtuse terms: my experience with Linux has definitely had it’s terminal moments and learning to de-Windowsify my tasking, but it’s come to the point where the cons of Windows make it a non-starter.
Maybe it’s not the year of the Linux desktop, but the years of the Linux desktop. Reaching a wider audience and finding a way to make choosing a distro is going to be a task.
I will say that while I’ve never bought one of their systems, System76 is a company I regularly check up on because I think it’s very cool that they’re PC building from the ground up with Linux (and their own Linux distro as well). It’s a trend in the right direction, at least.
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.
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.
Nvidia has to sell to a Chinese buyer for 25% more than a US buyer would pay to have equivalent profit. It’s certainly possible that China is willing to pay more than that difference, but US private sector is supposed to be in desperation mode for skynet, in addition to having direct white house access of lobbying against China for mere trinkets in tribute. MSFT and others have the power to tell whitehouse/other republicans that they want to buy the H200s instead, and amplify warmongering BS as the reason. They just don’t want to buy them.
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.
US car companies are not supply constrained, including some of them with factories in China, and aren’t prohibited from selling all of their cars there if they were competitive. Nvidia has not been making H200s recently. It has astronomical record inventory levels (likely H200s based on lobbying win). Thier H20 cards that they sold to China the last 2 years, are the best value inference cards on ebay from China, but Americans were not allowed to buy them directly. Since about half of Nvidia GPUs are assembled in China, they have 0 problem with black market access to them, and massive secret Singapore customers of Nvidia are likely them directly profiting from Chinese black market with payment to Nvidia instead of pilferage of GPUs. I get that B200s B300s are better value/FLOP than H200s, but H200s could be priced to Americans/colonies on the same/similar $/flop, and if US/MSFT was really supply constrained, they’d buy or lobby government to force Nvidia to sell them at good $/flop. The Nvidia corruption is also likely to create new H200 production making newer GPUs “scarcer”
Attending those meetings must be soul crushing. The entire point of the call is to take advantage of your customers more, get more money out of them, and get more wasteful data centers built.
WE DON’T WANT DATA CENTERS, WE HATE THEM.
I hope AI dies a fast and painful death and the PC world can get back to normal.
I hope so, too. However when AI dies nothing will go back to normal. I have been waiting for things to go back to normal since the GPU shortage from the bitcoin shambles. Christ, I’m still using a 980ti and have given up buying new games (which, ironically, probably saved me enough money to buy a top line GPU)
They will find another way to manufacture some shortage or another to bump up the prices and gouge gouge gouge.
god this is the newest product name. You have Office365 and now AI357!
AI357 as in I’d rather eat a .357? Impeccable marketing
you are killing it!
Microslop is allergic to good or descriptive product names
Could go down a lot further, a lot quicker when OpenAI Enrons. The whole tech space is a house of cards. Better to get out early and lose a little than be caught late and lose a lot.
Microsoft should double down on data center construction.
Yes, Microsoft should invest big in hardware!
Glad to finally see some uplifting news this month.
Oh no, anyways…
Might’ve been partly because of the Melania movie’s generation and how weak, unsmart and unwise it makes Apple look.
Everything above pennystock value is still to much for µ$lop stock!
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?
