Microsoft passes its first test on U.S. tariffs with limited product exposure

Microsoft passes its first test on U.S. tariffs with limited product exposure


Microsoft CEO Satya Nadella speaks during an event commemorating the 50th anniversary of the company at Microsoft headquarters in Redmond, Washington, on April 4, 2025. Microsoft Corp., determined to hold its ground in artificial intelligence, will soon let consumers tailor the Copilot digital assistant to their own needs.

David Ryder | Bloomberg | Getty Images

President Trump’s tariffs have dominated global news headlines for weeks. During Microsoft‘s earnings call with investors on Wednesday, though, tariffs came up only once in prepared remarks.

The reference from Amy Hood, Microsoft’s finance chief, had to do with sales of personal computers and Windows operating system licenses to other PC makers.

“Windows OEM and devices revenue increased 3% year over year, ahead of expectations, as tariff uncertainty through the quarter resulted in inventory levels that remained elevated,” Hood said.

While Microsoft sells Surface PCs and Xbox video game consoles, impact will likely be less direct than for companies that rely more on physical products.

Still, Microsoft does stand to see the effects of software spending from struggling clients, and Microsoft also faces higher costs as it purchases equipment from other countries.

The company is investing heavily to buy and install the necessary Nvidia graphics processing units across the world to power OpenAI’s ChatGPT and other artificial intelligence products.

Software might help companies respond in the event that their costs go up because of tariffs, CEO Satya Nadella said on the conference call

“I think if you sort of buy into the argument that software is the most malleable resource we have to fight any type of inflationary pressure or any type of growth pressure where you need to do more with less, I think we can be super helpful in that,” he said. “And so if anything, we would probably have more of that mindset is, how do we make sure we are helping our customers, and then, of course, we’ll look to
share gains.”

The company sells a slew of AI products, including the GitHub Copilot that spits out source code suggestions for developers and the Microsoft 365 Copilot assistant that answers questions in Excel, Teams and other productivity apps.

Microsoft shares rose about 8% in extended trading after the call. The company reported higher revenue and earnings than analysts had predicted and issued an upbeat forecast.

WATCH: Corporate margins will be pressured as a results of tariffs, says Morgan Stanley’s Guerra

Corporate margins will be pressured as a results of tariffs, says Morgan Stanley's Guerra



Source

Texas Instruments’ stock falls on weak forecast
Technology

Texas Instruments’ stock falls on weak forecast

The Texas Instruments headquarters in Dallas, Texas, on Jan. 21, 2024. N. Johnson | Bloomberg | Getty Images Texas Instruments reported second-quarter results on Tuesday that beat analysts’ expectations for revenue and earnings. But the stock fell in extended trading due to a third-quarter forecast that missed estimates. Here’s how the chipmaker did versus LSEG […]

Read More
Trump met with Amazon’s Jeff Bezos at the White House last week
Technology

Trump met with Amazon’s Jeff Bezos at the White House last week

Jeff Bezos, founder and executive chairman of Amazon, takes the stage during The New York Times’ annual DealBook Summit, at Jazz at Lincoln Center in New York City on Dec. 4, 2024. Michael M. Santiago | Getty Images President Donald Trump met with Amazon founder Jeff Bezos at the White House last week, CNBC has […]

Read More
Amazon to buy AI company Bee that makes wearable listening device
Technology

Amazon to buy AI company Bee that makes wearable listening device

Amazon logo on a brick building exterior in San Francisco on Aug. 20, 2024. Smith Collection | Gado | Archive Photos | Getty Images Amazon plans to acquire wearables startup Bee AI, the company confirmed, in the latest example of tech giants doubling down on generative artificial intelligence. Bee, based in San Francisco, makes a […]

Read More