Microsoft profits were up 33 percent year-over-year to $21.9 billion in the quarter ending December 31, its fiscal Q2 for 2024. The quarterly growth was the company’s strongest in more than two years. Executives credited it to excitement about artificial intelligence services and the resulting demand for cloud services including Microsoft Azure. Earlier this month, Microsoft achieved a $2.89 trillion market valuation, overtaking Apple as the world’s most valuable public company, and this week it surged past $3 trillion. Revenue was $62 billion for the quarter, up 18 percent.

The Washington Post reports that “AI put the five-decade old tech giant on top again,” with a chart listing the world’s five most valuable firms. Microsoft is No. 1, followed by Apple — both hovering around $3 trillion — with third-place Google closer to $2 trillion, then Amazon ($1.67 trillion), Nvidia ($1.54 trillion) and Meta ($1 trillion).

“Microsoft shares have surged nearly 70 percent over the last 12 months,” easily outperforming the tech-heavy Nasdaq Composite index, which rose by less than 40 percent, according to The Wall Street Journal. The growth translated to an additional $1 trillion in market value.

“It was a record quarter, driven by the continued strength of the Microsoft Cloud, which surpassed $33 billion in revenue, up 24 percent,” Microsoft CEO Satya Nadella said on the earnings call, adding that the company has “moved from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits.”

Microsoft’s Azure Cloud business unit now has more than 53,000 Azure AI customers, one-third new in the past year, Nadella said.

“Azure, grew 30 percent, faster than the previous three quarters,” reports The New York Times. Azure includes numerous AI offerings, including access to systems developed by partner OpenAI, in which Microsoft is an investor.

Xbox was another bright spot, with revenue up by 61 percent, according to the quarterly earnings release, reflecting for the first time the absorption of Activision Blizzard. Microsoft didn’t translate that gaming growth to dollars. For earnings purposes, Xbox is aggregated under “More Personal Computing,” which includes the Windows operating system.

More Personal Computing, with revenue of $16.9 billion and growth of 19 percent for the quarter, included “15 points of net impact from the Activision acquisition,” which closed in October.

The $69 billion acquisition “added about $2 billion to Microsoft’s revenue in the quarter, and accounted for about $440 million in operating losses,” according to  NYT, which observes “gaming has become Microsoft’s most important consumer business.”