Microsoft on cloud nine as shares hit record high

US tech giant’s cloud-based software and services driving gains in share price

Microsoft chief financial officer Amy Hood said transition to cloud represents the “single largest addressable market opportunity” for years. Photograph: iStock

Microsoft chief financial officer Amy Hood said transition to cloud represents the “single largest addressable market opportunity” for years. Photograph: iStock

 

Microsoft shares were trading around record highs in US markets on Friday after reporting first-quarter sales and earnings that topped analysts’ estimates, buoyed by growing demand for cloud-based software and services.

The shares surged as much as 6 per cent to a record $60.74 in premarket trading on Friday. When official trading opened they traded as high as $60.41 in early trading before slipping slightly to $60, still almost 5 per cent up on the previous day’s close.

Profit excluding certain items was 76 cents a share on adjusted sales of $22.3 billion, the Redmond, Washington-based company said on Thursday.

Analysts estimated profit in the period ending last month would be 68 cents on revenue of $21.7 billion, according to data compiled by Bloomberg.

Data centres

Chief executive Satya Nadella has been investing in data centres and striking partnerships to bolster sales of Microsoft’s main corporate cloud products, Azure and Office 365 – internet-based versions of the popular productivity apps, email and collaboration tools.

Revenue from Azure cloud services more than doubled, helping Microsoft outperform even as demand for PCs remained in the doldrums and its mobile-phone efforts collapsed.

Commercial cloud is driving revenue growth.

“This transition to the cloud represents the single largest addressable market opportunity we’ve all seen in many, many years,” chief financial officer Amy Hood said.

“There is such an opportunity to grow our overall revenue and do it profitably.”

– (Bloomberg)