What's going on?

Microsoft reported better-than-expected quarterly results late on Tuesday.

What does this mean?

Microsoft�s cloud computing business is its growth backbone, but corporate customers have tightened their belts in recent quarters and slowed the segment�s growth. And although that slow-down didn�t reverse last quarter, the segment still flexed its muscles, beating analysts� expectations with 18% revenue growth compared to the same time last year. There was good news for Microsoft�s productivity business too, which includes Microsoft 365 and LinkedIn, as revenue jumped a better-than-expected 7%. And even the bad news was predictable: the PC segment saw revenue decline by 19%, but experts were calling last quarter the worst for PCs since the 90s, so that�s hardly a surprise. So, sure, Microsoft�s overall revenue rose at the most sluggish pace since 2016, but the unexpectedly handsome profit still relieved investors, who initially sent shares up 5%.

Why should I care?

Zooming in: OpenAI, closed deal.
Newsflash: Microsoft�s $10 billion investment in ChatGPT-owner OpenAI has been confirmed. The move will give OpenAI�s wizards access to more powerful cloud computing resources, which should help the firm up its research game and run more advanced models for programs like ChatGPT and DALL-E. And Microsoft�s getting its back scratched too: the software heavyweight plans to add OpenAI�s tech to its corporate and consumer product offerings, a step that analysts think could help in its battle of wits with Amazon�s AWS cloud service.

For markets: Good tidings.
The S&P 500 has hit high gear this year, cruising through the past few weeks in the green � but whether or not it stays on course will be influenced by how the tech sector fares this earnings season. Information-tech makes up over a quarter of the entire index, after all, so the S&P 500 could continue its promising trajectory if next week�s results from the likes of Meta, Apple, and Amazon follow in Microsoft�s footsteps.