Microsoft shares jumped 9% after the software giant reported quarterly financial results that beat analysts’ expectations, giving the company’s stock its best gain since March 2020.
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The Azure cloud division saw quarterly revenue grow 33% year over year, with Microsoft attributing half of that growth to artificial intelligence. “Clearly the macro environment remains challenging, but with Azure returning to ‘outperforming growth’ mode, we believe this is a positive development and highlights not only the strong demand for AI services in Azure, but also MSFT’s broad base of infrastructure offerings to support the ongoing migration of enterprise workloads to the cloud,” said Kirk Materne, an analyst at consulting firm Evercore ISI.
In its fiscal second quarter, the Azure segment showed weaker-than-expected growth and a slowdown from the previous three-month period. Microsoft said it expects the segment to grow between 34% and 35%, while StreetAccount analysts had forecast growth of 31.5%. The company’s revenue for the quarter ended March 31 was $70.1 billion, up 13% from the same period a year earlier. Net income rose 18% to $25.8 billion, with earnings per share reaching $3.46.
Microsoft said it expects revenue in the range of $73.15 billion to $74.25 billion for the current quarter, a robust outlook that helped ease analysts’ concerns that President Donald Trump’s tariff policies are hurting tech giants. Microsoft also told investors it plans to continue investing in expanding its infrastructure to support its artificial intelligence business. The company reiterated that it expects capital spending to increase in the new fiscal year, albeit at a slower pace than it has in the current year.
«Overall, despite macro uncertainty, Microsoft appears poised to profit from its AI investments, which should drive stock gains and more sustainable growth going forward,” Morgan Stanley analyst Keith Weiss said.