Asia Tech Wire (Oct 31) -- Microsoft's cloud computing and Office software businesses drove stronger-than-expected quarterly revenue growth, signaling that the company's huge investment in artificial intelligence is starting to pay off.

Revenue for the first quarter of fiscal 2025, which ends Sept. 30, 2024, rose 16% to $65.6 billion, beating analysts' average estimate of $64.5 billion, the company said in a statement Wednesday.

During the quarter, Microsoft realized a net profit of $24.7 billion, up 11% from a year earlier.

Specifically, adjusted for currency fluctuations, the Azure cloud computing division recorded a 34% increase in revenue. According to some analysts, that's down slightly from the 35% growth in the previous fiscal quarter, but above Microsoft's previous forecast.

Microsoft CEO Satya Nadella overhauled the software maker's product line with AI models from partner OpenAI. He now seeks to attract enough paying customers for upgraded software and services to drive Microsoft's growth in the coming years.

Meanwhile, enterprises are using Microsoft's data center capacity to drive development of their own AI applications, boosting demand for the much-hyped Azure business.

Jackson Ader, an analyst at KeyBanc Capital Markets, said, "People are shifting from just talking about artificial intelligence and testing and piloting artificial intelligence to actually putting it into production."