The US group presented its results on Tuesday evening.
(Photo: Reuters)
san francisco The US software group Microsoft benefited from the cloud business in the first quarter of 2022. Revenue rose 18 percent from the same quarter last year, and net income increased eight percent to $16 billion. That’s more than analysts expected. In the after-hours trading, however, Microsoft shares initially fell into the red, but later recovered slightly.
Microsoft CEO Satya Nadella emphasized the future prospects of Microsoft products: “Digital technology will be the key input to generate economic output,” Nadella said. “Continued interest in our cloud and strong sales activity,” added CFO Amy Hood, “has resulted in better-than-expected business sales of up 28 percent and cloud revenue is up 32 percent, year-over-year to $23.4 billion. gone up.”
CEO Nadella sees no sign of cutbacks in corporate IT spending. On the contrary, he stressed that automation and software could help deal with the current rising prices. As far as Office is concerned, for the first time you also have products to specifically address customers in emerging countries.
As for the Covid situation in China, Chief Financial Officer Amy Hood estimates that if factory closures continue into May, the PC segment is likely to be affected. So far, sales of 14.65 to 14.95 billion dollars are expected in the More Personal Computer division in the current quarter.
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The near future continues to look good for Microsoft. The important growth driver Azure, the central platform for cloud computing, will probably grow by around 47 percent – only two percentage points less than in the past quarter. This means that Microsoft should once again be the fastest-growing cloud provider ahead of Amazon Web Services (AWS) and Google’s cloud. For the current quarter, revenue from the intelligent cloud division (all cloud offerings including Azure) is estimated at $21.1 to $21.35 billion.
Even the gaming division, which had long been affected by delivery problems, grew significantly over the course of the year. The Xbox console has gained market share and cloud gaming has also become more important. Over ten million players would have used cloud offers. Revenue at Azure Gaming has increased by 66 percent since the beginning of the year.
US investors were initially spooked by the figures presented – Microsoft shares initially fell by three percent in after-hours trading after the paper on the US technology exchange Nasdaq was already 3.7 percent below the previous day’s close at around $270. Late in the evening, however, Microsoft was marginally up again in after-hours trading.
The Google parent company Alphabet also presented its quarterly figures in the evening. Both reports were eagerly awaited because they are interpreted as indicators for the further development of tech stocks on Wall Street.
Deutsche Bank Research has set a price target of $390 for the Microsoft paper, but warns investors not to “lose sight of quality” amid the general chaos in financial markets. An existing “buy” rating was confirmed. Azure Cloud is not showing any signs of fatigue or macroeconomic headwinds. The PC market continues to rely on Windows. Office365 office software continues to migrate from office desks to the cloud with solid subscription growth. The new acquisition Nuance has hardly contributed anything to the result, but has also not brought any burdens and will develop positively.
Although Wells Fargo recently lowered its price forecast from 425 to 400, it still sticks to its buy recommendation. The job market for IT specialists is also benefiting from the Group’s continued strength. Year-over-year, the workforce grew 20 percent, or 16 percent excluding the Nuance acquisition.
More: Microsoft brings Windows to the cloud – competition for Chrome OS from Google