Microsoft shares surge 7% after the ChatGPT investor reveals AI boosted its cloud sales

• Microsoft shares rallied in Wednesday's premarket after its earnings beat Wall Street's targets.
• If the gains hold up, the tech giant could end the day with another $150 billion in market value.
• The ChatGPT investor disclosed that AI has boosted its Azure and Bing businesses.

Microsoft stock jumped in premarket trading on Wednesday after the tech giant revealed its AI offerings helped to boost sales of its cloud computing business over the past quarter.

The company's shares rose 7% to trade at just under $296 shortly after 4 a.m. ET. If the gain holds firm, Microsoft could end the day with a $150 billion increase in market capitalization.

The stock-price increase was sparked by the release of Microsoft's quarterly earnings after Tuesday's closing bell. 

The company reported earnings per share of $2.45 and revenue of just under $53 billion, both of which comfortably beat Wall Street's targets.

It also said that revenue from Azure and its other cloud services grew by 27% year-on-year in the first three months of 2023.

Microsoft's latest report covered a quarter in which it extended its ongoing partnership with OpenAI and launched a new version of its search engine Bing powered by the intelligent language tool ChatGPT.

In a post-earnings conference call, CEO Satya Nadella said that "investing to lead in the new AI wave" would be one of the tech giant's main business priorities, and that developments in this area were already boosting Azure's sales.

"Azure took share, as customers continue to choose our ubiquitous computing fabric – from cloud to edge, especially as every application becomes AI-powered," he told shareholders.

Nadella added that Bing now has over 100 million daily users, and has seen downloads jump since Microsoft announced it was integrating ChatGPT technology into the search engine.

Other tech giants also rallied ahead of the opening bell Wednesday.

Google parent Alphabet, another large cloud provider, rose just under 1% after reporting strong results of its own Tuesday.

Amazon, which also has a big cloud business, climbed around 4% ahead of its own first-quarter earnings, set to be published Thursday.

Read more: Microsoft, Google, and Baidu are putting the final touches on their answers to ChatGPT. Here's what they have planned and what it means for investors.