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.
What else can plunge down on necks real fast?
I was surprised that S&P500 gained over last year ~16%, but dollar lost compared to euro ~15℅, so there was no real gain.
FYI, there is a USD index, DXY. It lost ~12% overall compared to a basket of other currencies
Mosquitos
god this is the newest product name. You have Office365 and now AI357!
AI357 as in I’d rather eat a .357? Impeccable marketing
Microslop is allergic to good or descriptive product names
you are killing it!
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.
Writing this from Linux which I installed last fall in lieu of the Windows 11 update.
I’m still using both OS via dual boot, and I still have some unresolved issues on Linux, but I will fully transition during the course of this year.
One thing that is really mind-blowing is the difference in performance on my ~7 y/o laptop. My Linux Mint is just lightning fast compared to Windows 10. You can quite literally feel how Windows runs a thousand random things in the background (most of which I never asked for) whereas Linux feels very clean and… empty, but in a good way.Not sticking up for Microsoft, but when you first setup a Windows machine, all those metrics toggled on like advertising and keyboard or handwriting usage, etc, I turn all 6 of those off. One in Windows I now uninstall Copilot and disable stuff like phone link, OneDrive, and pretty much every application from running at startup ( Adobe if needed, etc)
This is just for work, but I can usually get away with lower spec machines by curating what’s allowed to run by default.
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Ain’t that the truth? I feel like Distro hopping is an integral part of falling in love with Linux. In my case, I get distro hopping zoomies every few months 🤣
Something that I’m super chuffed with is that a few years back, one of my most cheapskate friends asked me for advice on buying a new laptop. When I presented their options to them, they were reluctant to cheap out and get a mediocre laptop that wouldn’t last them very long, but they also balked at the price of even the midrange laptops (they weren’t keen on spending more than £250 on a laptop, which wasn’t enough to get anything that they’d consider to be decent and worth the effort/cost).
As a long shot offer, I told them that I could always try installing Linux on their laptop if they wanted to wring another couple of years out of their existing laptop. I was a tad surprised when they opted for this, and even more surprised at how well they took to it; I jokingly call them one of my “normie” friends, because they’re one of the people whose perspective I ask for when I’m trying to calibrate for what non-techie people know/think. I only had limited experience with Linux myself at that point, having only played around with things on live USBs before. I had heard that Linux could give new life to slow computers, but I was surprised at just how effectively it did this.
(A small amusing aspect to this anecdote is that when I was installing it, I said that one of the side benefits of running Linux is that it could boost nerd cred amongst folk like me. They laughed and said that they didn’t expect that this would be a thing that would ever end up being relevant. Later that year, they got a girlfriend who saw that my friend was running Linux, and expressed approval, which is quite funny to me)
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?
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!
“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.
“If I had bet on black instead of red I would have won”
I think she’s saying she could have allocated the GPUs to Azure to game the metrics, but Microsoft chose to allocate them to internal projects, which is a form of self-investment. She’s not saying they made the wrong decision, she’s saying their decision in this longer-term investment makes the short-term metrics worse.
If ifs and butts were candy and nuts we’d all have a merry Christmas.
The same Melius Finance that gave Tesla stock its highest rating of “must own” due to Elon lying again that Full Self Drive is being deployed imminently to Teslas via their in-house “AI chips” eta Dec 2025?
https://finance.yahoo.com/video/tesla-stock-must-own-melius-220721932.html
Tesla stock is currently at $416 after a high of $474 in November, around when this call was made.
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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?
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”
They are still up 25% over the past 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.
Maybe get rid of that Bitconnect-ass looking dude?
I thought crypto was really cool back in the day. I had a guy ask me about Bitconnect because he was considering buying some. I looked into it and told him it looked sketchy, and I didn’t understand how they could possibly promise those returns
He dumped all his money into it. Only weeks before it collapsed too. Lost his house and wife. Ended up moving across the country to live with his brother
Nice guy though
BITCONNEEEEEEEE……eternity
Keep it going!
I would desperately love for companies to lose big on LLMs. The vast majority of users just don’t seem worth the huge energy costs. I do think there are a number of worthwhile ML applications that could make the world better, but I have little faith that they’ll be allowed to unless they generate big profits.
