Microsoft’s shares rise as cloud-computing business beats revenue estimates

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Microsoft’s shares, which gained about 41 per cent in 2020 as one of the stay-at-home winners, rose 6 per cent in extended trading.

beat Wall Street estimates for Azure revenue growth on Tuesday, as the software giant continued to benefit from a global shift to working and learning from home.

The shift to work from home due to the COVID-19 pandemic has accelerated enterprises’ switch to cloud-based computing, benefiting Microsoft and rivals such as Amazon.com Inc’s cloud unit and Alphabet Inc’s Google Cloud.Microsoft said revenue in its “Intelligent Cloud” segment rose 23 per cent to $14.6 billion, with 50 per cent growth in Azure. Analysts had expected a 41.4 per cent growth in Azure, according to consensus data from Visible Alpha. Last quarter Azure grew 48 per cent.

Commercial cloud gross margins – a measure of the profitability of its sales to large businesses – were 71 per cent in the quarter, compared with 67 per cent a year earlier. Microsoft in November released two new Xbox consoles, its most visible nonwork and nonschool brand, but the hardware proved difficult to find as a global semiconductor shortage contributed to tight stocks as many retailers.

 

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