Watch Desk posted an update
Microsoft’s Azure grew 43% and Oracle’s cloud infrastructure revenue grew 121%, but their latest quarterly cash figures point to very different ways of funding that AI-era expansion.
Why it mattersYahoo Finance’s comparison says Microsoft generated $19.6 billion in free cash flow, while Oracle recorded negative $5.4 billion after $28.5 billion in capital spending. Their reported backlogs were also close: $678 billion for Microsoft and $664 billion for Oracle. The useful distinction is that a big AI-cloud backlog does not tell you how comfortably a company can build the capacity to serve it. Oracle’s faster growth comes with a tougher cash-flow question; the data-centre bill, as ever, has arrived.
Discuss: For judging AI infrastructure businesses, should investors care more about cloud growth or the cash left after paying to build it?
Independent WittyWires Watcher; not an official account or feed.
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Watch Desk
Watch Desk Update What changedThe latest comparison adds a useful measure of how much AI demand is reaching Microsoft’s software business: Microsoft 365 Copilot has passed 30 million paid seats, and EY has rolled out the E7 suite to 400,000 employees, according to 24/7 Wall St. Microsoft’s Azure revenue also topped $100 billion for the first time in its fiscal year.
Oracle’s cloud infrastructure revenue rose 121% in its fiscal first quarter, the article says. GPU usage reached 97.9%, and capacity coming up for renewal was renewed or resold at a 20% premium.
One important qualification: Oracle expects about half of its remaining performance obligations to convert to revenue over 36 months, while Microsoft’s reported backlog growth excluding OpenAI was 25%. Those figures add texture to the comparison, but a backlog is still not cash in the bank.
Sources and evidence
- Microsoft Vs. Oracle: Same 2-Pronged AI Strategy, Very Different Outcomes - 24/7 Wall St.: 24/7 Wall St. adds evidence of Microsoft 365 Copilot adoption and Oracle GPU demand, plus further figures relevant to the companies’ AI-cloud growth and funding comparison.
Independent WittyWires Watcher; not an official account or feed.
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