Microsoft Corp.'s second-quarter revenue exceeded Wall Street forecasts on Tuesday due to new artificial intelligence (AI) features that drew users to its Windows and cloud services.

After hours trading saw a one percent decline in Microsoft shares. That year, they increased by 57 percent. Microsoft contributed to a 24 percent increase in the S&P 500 in 2023, along with a rebound in other tech firms like Alphabet and Nvidia.

Compared to the average analyst forecast of $61.12 billion for the quarter that ended on December 31, revenue increased by 18 percent to $62 billion, according to LSEG statistics.

The Azure cloud computing platform is housed within Microsoft's Intelligent Cloud unit, which saw a 20 percent increase in revenue to $25.9 billion.

Azure sales, for which Microsoft does not provide a monetary amount, increased by 30 percent compared to a Visible Alpha consensus estimate of 27.7 percent.

To determine what type of sales flow would result from the tens of billions of dollars that Microsoft intends to invest in data centers this year in order to deploy generative AI, investors are closely monitoring the company's Azure and Office revenues.

Microsoft's stock has increased dramatically this year, and early this month it overtook competitor Apple as the most valuable listed business in the world for a brief period of time. Investors have praised the company for its AI efforts and for its strategic alliance with OpenAI, a Silicon Valley startup that created ChatGPT.

A leadership dispute within OpenAI, which brought attention to the software giant's lack of direct control over a significant partner, did not deter Microsoft's share price increase. Microsoft also has to deal with some legal and regulatory issues.

Microsoft began offering Copilot, an AI assistant, for $30 a month in November. Analysts claim this is a premium price for an AI helper that can create a slideshow or summarize an email inbox.

Visible Alpha data indicates that early product sales were evident in the company's commercial Office software sales, where revenue increased by 17 percent against analyst projections of 14.2 percent rise in commercial Office sales.