Microsoft Reports Strong Earnings On Cloud Computing
Microsoft reports strong quarterly earnings
Microsoft beat market expectations Tuesday, posting strong quarterly results in cloud computing software and software. Microsoft still benefits from the shifting of work and play, as well as the ability to shop and learn.
The US tech colossus, which announced last week an agreement to purchase gaming giant Activision Blizzard, said profit increased to $18.8 billion in the final three months of last year.
CEO Satya Naidella stated that digital technology was the most flexible tool that could overcome limitations and reinvent daily work and life with announcing revenues of $51.7 million.
Microsoft investments include investing in the booming videogame market , and by extension the metaverse. This is the virtual reality vision for the future of the internet.
In an earnings call, Nadella pointed to the millions of players playing games such as Forza, Halo and Minecraft Many of them are purchasing "avatar" proxies for online worlds, stating that the metaverse is an inevitable extension.
According to executives, Microsoft is also integrating virtual gathering components with nongame offerings such as Teams online collaboration software.
"We are in a great position to capture what I believe is the next wave of the internet," Nadella said on the conference call.
The Redmond Washington-based tech company last week announced a landmark agreement to purchase scandal-hit "Call of Duty" maker Activision for $69 billion.
This would be the largest buyout ever by Microsoft and is far ahead of LinkedIn in 2016 for $26.2 billion.
The earnings of the career-focused social network was up 37 percent comparison with the same period the year before, according to the earnings report.
Microsoft has stated that Microsoft will be the third largest gaming company in terms of revenue, after acquiring Activision which is a troubled but highly successful business following Tencent and Sony.
The merger is expected to receive regulatory approval at a moment when Europe and the United States are seeking to limit Big Tech.
According to the earnings report, revenues in the Microsoft division that makes Xbox consoles and video game content increased by 10 percent in the most recent quarter.
- 'PC renaissance' -
"Redmond is still seeing strength in the field as many enterprises continue to move towards the cloud using Nadella & Co," Dan Ives, Wedbush analyst said in a letter to investors.
Ives believed that the high earnings from Microsoft as an "broader sign of the strength we expect will see across the enterprise-cloud software landscape during the earnings season."
Microsoft competes with Amazon and Google in the cloud computing market.
Units devoted to cloud services at Microsoft each saw double-digit growth in revenue, which brought in tens of billions of dollars, according to the earnings report.
Microsoft's division devoted to the Windows operating system also thrived in what Nadella described as a "renaissance" of the personal computer (PC) market that had been withering before the pandemic forced a lot of people from all over the world to stay home.
Nadella stated that "more people are using computers to exercise their power and unleash their imagination."
"We are experiencing a revival of the PC with increased time spent on PCs and PCs per household."
Microsoft stock rose slightly after the earnings call.
According to Wedbush that some of the most optimistic investors were expecting better financial results.
"In this jittery market we will see every tech print initially viewed as glass half empty, but ultimately, it's an important cloud name that is a good one to own," Ives said.
Third Bridge vice president Scott Kessler was among those who were looking to know what impact an ending of the pandemic would have on Microsoft growth, which is driven by remote work, play, and school.
Kessler wrote in an article that "we've seen a lot of darlings from the early Covid period becoming fallen Angels."
Nadella believed that technology will remain a valuable resource as people "reimagine" their lives and society seeks solutions to issues like the labor shortage.
Nadella said, "We are experiencing a generational shift in our economy and society."