Microsoft’s strong earnings on Wednesday sent the share price up by more than 10%. This played an integral role in bringing back confidence in Microsoft’s growth potential, as well as broader confidence in the Mag7 entirely given the macro headwinds. Revenue in this quarter was just above $70 billion – a 13.3% year on year increase – shattering consensus estimates. The biggest headline, however, was the 33% revenue growth from the Azure division, a staggering increase from the previous quarter.
CEO Satya Nadea projects growth in the AI and cloud divisions to continue increasing. Revenue projections for the next quarter exceed consesus estimates by over 2 billion. Citing surging demand for its products, the company has also announced capital expenditure spending to reach $80 billion.
Microsoft’s earnings has set a new tone for the AI sector; both the 50 and 200-day moving averages have reverted back to bullish trends and investors will be closely watching the movements over the following weeks. Consesus price targets points to a price of around $500, implying a 15% upside for the company.
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