Microsoft investors will have one big question when the tech giant reports earnings on Tuesday (July 30): has growth in its Azure cloud-computing business picked up enough to justify the billions of dollars being spent on artificial intelligence infrastructure?

Widely seen as the front-runner in the race to make money from AI, thanks to its tie-up with ChatGPT maker OpenAI, Microsoft is expected to report that Azure's growth stayed steady quarter-over-quarter at about 31 per cent between April and June, according to data from Visible Alpha.

That would be in-line with the company's forecast, but investors are expecting a bigger contribution from its AI business in the fiscal fourth quarter after it accounted for seven percentage points of Azure's growth in the first three months of the year.

Microsoft's capital spending likely surged about 53 per cent year-over-year to US$13.64 billion (S$18.32 billion) in the period, according to 16 analysts polled by LSEG. A big step up from the US$10.95 billion in expenditure it recorded in the previous quarter.

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