Microsoft's Stellar Performance Surpasses Expectations, Boosts Market Confidence

Grzegorz
Grzegorzabout 2 months ago

Microsoft has reported outstanding results in both revenue and profit, outperforming forecasts. The company’s Azure cloud segment surpassed analysts’ predictions. With the upcoming earnings call, Wall Street will be keenly observing how President Trump’s tariffs may be influencing Microsoft’s business.

Following the announcement of its impressive quarterly results, Microsoft shares surged approximately 9% in after-hours trading on Wednesday, largely thanks to the Azure cloud’s remarkable performance. The company also issued unexpectedly strong guidance, instilling further market confidence.

Here’s a breakdown of Microsoft’s achievements compared to LSEG’s projections:

  • Earnings per share: $3.46, exceeding the expected $3.22
  • Revenue: $70.07 billion, surpassing the anticipated $68.42 billion

The company has forecasted revenue between $73.15 billion and $74.25 billion, surpassing LSEG’s midpoint estimate of $72.26 billion. Azure is projected to grow by 34% to 35% in constant currency terms, outperforming the 31.5% consensus from StreetAccount.

Microsoft’s management reiterated plans for capital expenditure growth in the upcoming fiscal year, although at a more moderate pace than the current fiscal year of 2025. The projected operating margin of 43.35% fell just short of StreetAccount’s 43.5% estimate.

Revenue for the fiscal third quarter, ending on March 31, increased by 13% compared to the previous year. Net income soared 18% to $25.8 billion, up from $21.9 billion, or $2.94 per share, just a year ago.

Earlier this year, CEO Satya Nadella announced Microsoft’s intention to invest $80 billion in fiscal 2025 for the development of data centers to support AI workloads. Microsoft’s commitment to AI infrastructure saw capital expenditures, excluding finance leases, climb to $16.75 billion, a nearly 53% increase.

Azure’s revenue witnessed a 33% rise, with 16 points of this growth attributed to AI. Microsoft also revealed that GitHub Copilot assistant now serves over 15 million users, marking a fourfold increase from the previous year.

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