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Microsoft cloud performance lags highest Wall Street hopes -Breaking


© Reuters. FILE PHOTO – A smartphone can be seen at the Microsoft logo on this illustration taken July 26, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

Jane Lanhee Lee and Nivedita Balu

(Reuters) -Microsoft Corp met Wall Street’s targets for cloud service revenue. However, that wasn’t enough to satisfy some optimistic investors. Shares fell 5% during extended trade.

While total revenue exceeded expectations, the Azure cloud service did not perform as well. Visible Alpha reported that Azure revenue growth was 46%, which is in line with analyst predictions. Wedbush analyst Dan Ives stated in a note that the stock declined because Azure revenue didn’t meet the Wall Street bullish forecast at 48%.

“It all boils down the guidance on the conference, this will serve as the main focus for Street to measure broader enterprise/cloud expenditure into the remainder of 2022 against this backdrop white knuckle,” he said.

Ives described Microsoft’s (NASDAQ:) performance as “robust”, a sign that Microsoft “continues to see strength” in its field.

Microsoft has become one of the most valuable companies in the world by betting heavily on corporate software and services, especially its cloud services and the movement to the Web of its Outlook email and calendar software, known as Office 365.

Microsoft Office 365 and Microsoft Teams were also popular because of the switch to learning and working from home. Cloud services from Microsoft, Alphabet Inc (NASDAQ.) Inc and Inc (NASDAQ.) Inc soared during the pandemic.

Microsoft’s largest segment which provides cloud services, Azure, the flagship offering of the cloud, saw 26% growth in revenue, and the revenues for the office that hosts its Office 365 services grew 19% during the quarter.

From $15.46 trillion, which was $2.03 per shares, one year ago, net income increased to $18.77billion, or 2.48 per share.

Revenue rose from $43.08 Billion a year ago to $51.73B during the last three months, up from $43.08 Billion a year before.

According to data from Refinitiv, analysts had an average revenue expectation of $50.88 trillion.

The proposed acquisition by Microsoft of Activision Blizzard Inc for $69 billion (NASDAQ:) is also attracting investors. This deal, which was announced Jan. 18th, will be a significant expansion for the company’s gaming division. The company will also be expanding its efforts in the “metaverse”, or the merging online and offline universes. This acquisition will bring about corporate and consumer benefits.

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