BENGALURU/OAKLAND: Microsoft Corp forecasted double-digit revenue growth for the upcoming fiscal year on Tuesday, fueled by demand for cloud computing services, and its shares rose around 4%.

Microsoft expects Intelligent Cloud revenue of $21.1 billion to $21.35 billion in its fiscal fourth quarter, owing to robust growth in its Azure platform. According to Refinitiv statistics, this compares to a Wall Street estimate of $20.933 billion.

“If there is a macro headwind, having more value for less money means you win. In our situation, we have tremendous advantages throughout the stack when it comes to our commercial cloud solutions “Satya Nadella, CEO of Microsoft, said when asked how the business planned to achieve double-digit growth in the coming fiscal year.

Microsoft’s propensity to defy industry trends was highlighted by TECHnalysis Research chief analyst Bob O’Donnell.

“Despite the present doom and gloom surrounding big tech, Microsoft’s solid profits and healthy projections demonstrate that not all technology is in jeopardy.” “According to O’Donnell. “There is still plenty of opportunity for startups that focus on supplying goods and services that businesses require to modernise their operations.”

Microsoft reported earnings and sales for its fiscal third quarter that above Wall Street projections on Tuesday, benefitting from increased demand for its cloud-based services.
Microsoft’s statistics suggest that it will be able to maintain its pandemic-fueled sales growth when economies reopen and businesses transition to a hybrid strategy that allows employees to work from both the office and from home.

According to Brett Iversen, Microsoft’s general manager of investor relations, this trend is also helping to drive greater revenue for Windows products. “Strength in the business PC sector pushed up 11 percent in Windows OEM revenue,” he told Reuters.

The third-quarter Azure annual growth rate of 46.0 percent was consistent with the previous quarter and in line with Visible Alpha’s projection of 45.6 percent growth. Nonetheless, Azure growth has been steadily declining since fiscal 2020, when it was in the 60 percent range.

In contrast, Alphabet Inc, Google’s parent company, stated on Tuesday that Google Cloud’s growth rate in the first quarter dipped slightly to 43.8 percent, from 44.6 percent in the fourth quarter of 2021. Alphabet’s first-quarter sales fell short of estimates, and the company’s stock fell 2% in after-hours trade.

According to Microsoft’s Nadella, the number of Azure agreements worth more than $100 million more than quadrupled year on year in the third quarter.

“These figures suggest that clients are continuing to flock to Microsoft as they accelerate their migration to cloud computing, and the present uncertain economic situation has not yet damaged the company’s major growth engine,” said Haris Anwar, senior analyst at Investing.com.

Nonetheless, Amy Hood, Microsoft’s chief financial officer, warned the company’s operations might be harmed if China’s closure over the epidemic stretches beyond May, while the present impact of the shutdowns is already included in Microsoft’s projections.

“However, continued manufacturing shutdowns that stretch into May will significantly harm our expectations across Windows OEM, surface, and Xbox devices,” she warned investors.

In the third quarter, the corporation recorded sales of US$49.36 billion, up from US$41.7 billion the previous year. According to Refinitiv IBES data, analysts predicted sales of US$49.05 billion on average.

Net income increased to US$16.73 billion, or US$2.22 per share, in the fiscal quarter ended March 31, from US$15.46 billion, or US$2.03 per share, the previous year. This surpassed analyst expectations of $2.19.

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