Microsoft and Amazon, two of the world’s biggest software and e‑commerce conglomerates, posted higher‑than‑expected quarterly results in early June. Both firms credited a surge in artificial‑intelligence (AI) usage to a sizeable lift in revenue and earnings, underscoring that AI is no longer a research‑phase expense but a commercial engine. Microsoft’s cloud arm Azure grew 19% YoY, while Amazon Web Services (AWS) recorded a 25% jump in infrastructure revenue, driven largely by demand for generative‑AI workloads. Microsoft’s earnings per share beat estimates by 18%, and Amazon’s operating margin widened to 26% from 24% last year, reflecting the monetisation of AI‑enabled services.
However, both companies flagged that server capacity and bandwidth constraints are beginning to bite, signalling that the next wave of growth will require significant investment in data‑centre expansion. , Europe and Asia to keep pace with demand. For Indian retail investors, the news reinforces the narrative that cloud‑based AI services are a long‑term growth driver. The Nifty IT index has already rallied 4% in the past month as investors bet on the sector’s AI exposure.
While the companies’ infrastructure bottlenecks could temper near‑term earnings, the continued push into AI is likely to lift Indian cloud‑service providers and related hardware makers over the next few years. Investors may want to monitor the performance of firms like Infosys, TCS and HCLTech, which are expanding their AI offerings to compete in the global market.