Microsoft: Continuing Cloud Boom Keeps The Cash Register Ringing

Microsoft

The reporting season is in full swing and things are getting really exciting. Investors are watching the results of the tech giants with suspicious eyes. While Alphabet (GOOGL) reported a slowdown in the advertising market, business is booming at software giant Microsoft (MSFT). Above all, the lucrative cloud business once again proved to be a driving force.

Microsoft Can Increase Sales By 18%

Microsoft boss Satya Nadella was satisfied with the presentation of the results. No wonder – the figures were impressive. In the past quarter of the current fiscal year, sales climbed by 18% to $49.4 billion.

Cloud Boom Boosts Business

The cloud business again proved to be a strong growth driver. Year-on-year, cloud revenues increased by 26% to $19.1 billion. This means that the lucrative business with computing power in the cloud now accounts for 38.6% of total company revenue.

Within this segment, revenue from server products and cloud services improved by 29%, while Azure and other cloud services even grew by 46% in terms of revenue. This exceeded Wall Street analysts’ forecasts. In the run-up to the figures, the bankers had assumed a plus of between 43% and 45%.

Career Portal Linkedin Also Grows Strongly

But not only the cloud business ran at full speed. The Linkedin career portal (34% increase in sales), the Xbox games console (+4%) and sales of Surface tablets (+13%) also grew significantly.

Contrary to the forecasts of many market researchers, who held out the prospect of falling PC sales, Microsoft was also able to make gains with Windows. Sales revenues from Windows licenses to PC manufacturers increased by 11%.

Microsoft Keeps Margins Stable

The technology giant was also able to convince in terms of profitability. The operating profit increased by 19% to $20.36 billion.

In the end, a net profit of $16.7 billion or $2.22 per share stood in the books. This was also slightly above expectations. Analysts had expected $2.19 per share.

The Rock Of The Company

So far, the software giant has done extremely well in the current uncertain environment. In March, the group was even able to push through price increases of between 10% and 20% for its customers.

In the cloud business (Azure), growth momentum picked up again slightly compared to the previous quarter. In addition, the company’s management is confident and is aiming for similar growth in the current quarter.

It is unclear, however, whether the nearly $70 billion acquisition of games developer Activision Blizzard will actually go through. The record deal would make Microsoft the world’s third-largest games provider. The company is also positioning itself for the upcoming “Metaverse.”

Investors seem to be convinced of the development, at least for the moment, and are pushing Microsoft shares up with their purchases. After the presentation of the business figures, shares of Microsoft rose significantly by 5%.

Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.
Dr. Gregor Bauer
Dr. Gregor Bauer
Dr. Gregor Bauer credits his trading success to combining fundamental aspects of a trade with expert technical analysis. A Certified Financial Technician from the International Federation of Technical Analysts (IFTA), he’s rated as one of Germany’s top 300 economic experts.

Related Articles