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• DJ Microsoft Raised a Key Growth Forecast. Why It Isn't What It Seems. -- Barrons.com, from 11:27AM ET on Thursday Aug 22, 2024 by Dow Jones

  11:27AM ET on Thursday Aug 22, 2024 by Dow Jones
  Companies Mentioned: GOOGL, MSFT, AMZN, GOOG
  By Adam Clark Microsoft is making adjustments to its financial reporting that are set to boost the growth rate for its closely watched cloud-computing business. Investors should be aware it isn't a fundamental change to the business. Microsoft said Wednesday that it would rearrange its reporting. Perhaps the most important change was that it intends to rejig what it includes within its Azure cloud-computing business. Microsoft said the change would make it easier to track consumption of its services. Revenue from search and news advertising will now be included with Azure, while Microsoft is moving revenue associated with its Power BI data visualization product for businesses and its Enterprise Mobility and Security group out of its Azure reporting and into a separate segment. The Enterprise Mobility and Security group focuses on identity verification and device management. This kind of accounting shuffling can seem irrelevant because it will make no difference to the company's overall revenue and earnings figures. However, how fast Azure grows is being closely tracked for signs of whether Microsoft's investment in artificial-intelligence technology will pay off in greater use of its cloud-computing services. The effect of the changes is mixed. Microsoft said it now expects revenue in its Intelligent Cloud unit, which houses Azure, to be between $23.80 billion and $24.10 billion in the current quarter, compared with its prior expectations of $28.6 billion and $28.9 billion. It also lowered its forecast for revenue in its More Personal Computing segment, while saying there was a corresponding boost to the revenue that would be generated in its Productivity and Business Processes segment. On the face of it, less revenue being reported in the Azure unit seems bad. The factor offsetting that is a faster rate of growth. Microsoft said that under the new reporting structure, it expects to report a 33% increase in revenue from Azure and other cloud services in its current quarter compared with the prior year. That was up from growth in a range of 28% to 29% under the previous structure. "While the changes are mechanical in nature and total revenue/op income/EPS are unchanged, they do suggest more stability in the Azure consumption business," wrote Citi analysts in a research note. Perhaps more important, the contribution of AI to Azure's growth is likely to look correspondingly greater. While Microsoft didn't provide a forecast for that metric in the current quarter, it did show how the reporting changes would have affected its June quarter. Under the new reporting structure, Microsoft would have reported 35% growth in its Azure business in the June quarter, with 11 percentage points being contributed by AI services. That compares with the reported figure of 30% growth with eight percentage points contributed by AI. Again, it is worth reiterating that the restructuring won't change Microsoft's business overall. But the change could make growth in Microsoft's cloud-computing business look better as investors watch it, Amazon.com's AWS, and Alphabet's Google for signs that any of their cloud-computing platforms are gaining an edge with AI. Microsoft didn't immediately respond to a request for comment. Write to Adam Clark at adam.clark@barrons.com This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal. Corrections & Amplifications Microsoft reported 30% growth for its Azure business in the June quarter, with eight percentage points contributed by AI. A previous version of this article incorrectly said AI contributed six percentage points of growth. (END) Dow Jones Newswires August 22, 2024 11:27 ET (15:27 GMT)

• Artificial Intelligence Influence on Global E-Commerce Market Expected to Skyrocket to $25 Billion By 2032, from 8:45AM ET on Thursday Aug 22, 2024 by GlobeNewswire

  8:45AM ET on Thursday Aug 22, 2024 by GlobeNewswire
  Companies Mentioned: MSFT, NVDA, AMZN, RZLV, GOOG

• Artificial Intelligence Influence on Global E-Commerce Market Expected to Skyrocket to $25 Billion By 2032, from 8:45AM ET on Thursday Aug 22, 2024 by Dow Jones

  8:45AM ET on Thursday Aug 22, 2024 by Dow Jones
  Companies Mentioned: MSFT, NVDA, AMZN, RZLV, GOOG
  
  MongoDB, Inc. (MDB) and Google Cloud (NASDAQ: GOOG), recently announced the two companies are collaborating to optimize Gemini Code Assist to provide enhanced suggestions for application development and modernization on MongoDB--the industry-leading developer data platform that millions of developers and tens of thousands of customers rely on every day for business-critical applications. Gemini Code Assist from Google Cloud generates code suggestions, answers questions about existing code in developers' integrated development environments (IDEs), and can update entire codebases with a single prompt. Through this collaboration, Gemini Code Assist can help developers get answers and information about MongoDB code, documentation, and best practices, so they will be able to more quickly prototype new features and accelerate application development.