Microsoft (NASDAQ: MSFT) stock fell slightly in the after-hours market before closing on a time-limited U.S. trading session. In trading, the world's largest market capitalization company ultimately fell in session after warning it would increase spending to expand its artificial intelligence technology. Redmond, Wash.-based Microsoft executives said on a call following the company's second quarter earnings call that it would need to expand its artificial intelligence infrastructure in areas such as data centers and servers, adding, "We're going to see a significant increase in spending sequentially," analysts said. told to

“A critical part of our shift to an AI-first posture is investing in what will grow over the next 10 years,” said Amy Hood, Microsoft’s chief financial officer.

Analysts at the German bank said that while Microsoft's guidance could indicate a temporary "compression" of autonomous cash flow margins, it should be viewed as a "positive signal" for the potential future performance of Microsoft's AI services.

Microsoft and other tech giants have been working to expand the presence of artificial intelligence in their products to meet the recent surge in demand for it. Critical to Microsoft's strategy is its stake in OpenAI, the research organization behind ChatGPT's popular chatbot. Microsoft, which owns a 49% stake in OpenAI, has pledged to invest more than $10 billion in the company.

With the OpenAI bet, investors are cautiously eyeing possible financial gains from Microsoft's Azure computing platform, a key source of revenue.

Azure's revenue grew 30% in the second quarter, thanks to robust demand for artificial intelligence services. Azure now has 53,000 AI customers, with more than a third added in the past 12 months, according to CEO Satya Nadella. Cloud revenue rose 20% to $25.9 billion, surpassing analysts' expectations of $25.3 billion.

The group didn't release numbers for new revenue from Microsoft 365 Copilot, a generative AI assistant built into many of its online products, but Nadella said early signs suggest it will become "standard equipment" for many enterprise customers.

“Microsoft is doing well by all accounts, and AI is clearly driving growth,” said Jesse Cohen, Senior Analyst at Investing.com. “The results show that AI products are stimulating sales and are already contributing to top and bottom line growth.” “I showed it,” he said.

As a result, in the three months to December 31, total sales increased 18% to $62 billion, and earnings per share rose to $2.93. Both metrics surpassed Wall Street expectations.

Yasin Ebrahim contributed to this report. Improve your investing with InvestingPro+ stock picking. Use the PROPLUSBIYEARLY coupon to get limited discounts on Pro and Pro+ subscription plans. Click here for more details and don't forget to use the discount code at checkout!