Microsoft posts better than expected earnings after announcement about datacenters

Microsoft revealed on Wednesday its plans for expansion in Europe, including the addition of new datacenters and a commitment to comply with EU regulations. This was announced just before the company shared its financial results that surpassed expectations.

Microsoft Vice Chair and President Brad Smith stated that the expansion aims to empower European countries to enhance their economic competitiveness using cloud and AI technologies. The company also pledged to uphold Europe’s digital resilience amidst geopolitical uncertainties and trade fluctuations.

The tech giant intends to boost its European datacenter capacity by 40% over the next two years in 16 European nations. By 2027, the European datacenter capacity is projected to more than double from 2023 levels, with operations spanning over 200 data centers across the continent.

Microsoft emphasized its dedication to adhere to local laws and regulations, ensuring that each investment made in the region aligns with governmental requirements. Smith emphasized the company’s compliance with European laws, including competition regulations and the Digital Markets Act.

While expressing confidence in Microsoft’s legal rights to maintain operations, Smith assured that the company would vigorously contest any government directive to suspend European cloud operations. Microsoft highlighted its track record of legal challenges to protect customer rights and privacy, including litigation during previous U.S. administrations.

In terms of financial performance, Microsoft reported first-quarter revenue of $70.7 billion and earnings per share of $3.46, exceeding analysts’ predictions. The company’s revenue increased by 13% year-over-year, with net income rising by 18% to $25.8 billion. Microsoft’s shares closed at $395.26, climbing 0.31% and gaining 6% in after-hours trading, with a market capitalization of $2.94 trillion, ranking second behind Apple.