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Microsoft Rises as Cloud Drives Q2 Growth, Momentum Seen Intact -Breaking


© Reuters.

By Dhirendra Tripathi — Microsoft stock (NASDAQ:) traded 3% higher in premarket Wednesday after its Cloud business powered ahead in the second quarter to emerge as its biggest business and the world’s second-most valuable company held out hope of the momentum continuing.

Total revenue rose 20% year-on-year in the second quarter to near $52 billion, propelled by 26% growth in the company’s Intelligent Cloud business that topped $18 billion in sales. The software company’s quarterly revenue has surpassed $50 billion for the first time.

Microsoft forecast Intelligent Cloud revenue of $18.75 billion-$19 billion for the current quarter, driven by “strong growth” in its Azure platform as more clients shift their operations to digital and need its Cloud to aid that pivot.

CEO Satya Nadella has now placed the company’s Cloud business in a formidable second behind Amazon (NASDAQ:) while Alphabet (NASDAQ:) plays catch-up.

Jefferies analyst Thill told Reuters that the company’s guidance of a sequential rise in Azure revenue is a strong assurance.

Other businesses grew in strong double digits too, although the company’s third-quarter projections for them pointed out to growth slowing sequentially.

The company claimed that productivity and business processes increased 19% to $16 Billion. It also stated that it would only reach $15.85 Billion in revenue. LinkedIn’s revenue grew 37%, while Office 365 Commercial revenues climbed 19%. In December, Microsoft 365 subscriber numbers topped 56 million.

Windows OEM revenue rose 25% as the world’s most popular operating system rode the surge in demand for PCs and laptops. Xbox Content and Services revenue rose by 10% The search and news advertising revenues, minus traffic acquisition costs, jumped by 32%. According to the company, revenue from More Personal Computing will be between $14.15 billion – $14.45 billion in third quarter. This vertical generated $17.5 billion in revenue during the second quarter.

At $2.48, the adjusted profit per share was significantly higher than expected.

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