Microsoft Corp. (MSFT.O) exceeded Wall Street’s quarterly revenue and profit projections on Tuesday, led by growth in its cloud computing and Office productivity software businesses and sales of its artificial intelligence technologies.
The business expected sales in its key segments for the current quarter to meet or exceed Wall Street estimates.
After-market trading rose 8.3% after Redmond, Washington-based Microsoft reported fiscal third-quarter profits of $2.45 per share, topping Wall Street projections of $2.23.
“The bottom line is that despite all the concerns that the sky is falling in big tech, the truth is companies still see value in cloud computing and there’s still a huge percentage of workloads that can be moved to the cloud,” said TECHnalysis Research analyst Bob O’Donnell.
According to Visible Alpha’s 23 analysts, Microsoft’s Azure cloud business grew 27% in the second quarter, exceeding analyst predictions of 26.6%.
Alphabet Inc. (GOOGL.O), another cloud company, announced solid profits Tuesday, raising its stock 2.4% after the bell. After-hours activity boosted Amazon.com Inc (AMZN.O) shares by 4.8%.
Refinitiv reported that Microsoft sales grew 7% to $52.9 billion in March, above analyst projections of $51.02 billion.
Microsoft still relies on software and cloud computing sales. However, this year, its relationship with ChatGPT maker OpenAI and AI-enhanced Bing search engine made headlines.
On a conference call with investors, CEO Satya Nadella stated the firm had over 2,500 Azure-OpenAI service clients, and AI was integrated into many products.
Nadella said AI features have increased downloads for Bing, which has 100 million daily users.
Microsoft’s Windows business relies primarily on PC sales, which have slowed in recent quarters. In addition, analysts expected a grim economic outlook to hurt it. As a result, Microsoft reported revenue of $13.3 billion vs. analyst projections of $12.19 billion.
Refinitiv said that the company’s productivity sector, which includes Office software and LinkedIn advertising revenues, had revenue of $17.5 billion, above analyst predictions of $16.99 billion.
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