Analyst: Microsoft's GPU computing leasing business has a gross profit margin of 42% and earns about $1000 per month per A100 graphics card.

CTOnews.com Sept. 20, Bernstein analyst Mark Moerdler released a report that Microsoft has taken the lead in generative AI products, AI platform software and design architecture, and its profitability may exceed initial expectations. He reiterated his overweight rating on Microsoft stock and raised its target share price slightly to $400 from $398.

"Microsoft has taken the lead in Generative AI products, platform software and design architecture to help customers make money using data and AI," Moerdler analysts wrote in a report. "they are actively investing in GPU/ AI supercomputers to meet strong demand."

The analyst estimates that Microsoft's cloud computing leasing service earns an average of $1.50 per hour per GPU, equivalent to about $1000 per month (CTOnews.com Note: about 7300 yuan currently); based on financial models, Microsoft GPU generates a gross profit margin of 42 per cent.

"the negative impact of generative artificial intelligence on Microsoft's Azure gross profit margin is smaller than expected," he wrote.

Moerdler also said Microsoft has added more high-margin technologies, including pre-built artificial intelligence models and other artificial intelligence services, which could boost revenue and profitability.

Microsoft itself is optimistic about its artificial intelligence prospects. Earlier this month, Amy Hood, Microsoft's chief financial officer, confirmed the company's previous forecast that revenue from its artificial intelligence tool suite would reach $10 billion faster than any other software business in its history.