Wall Street is disappointed that Microsoft did not meet market expectations, particularly with Azure. However, Microsoft’s fiscal second-quarter results showed a 17% revenue increase year over year, 160 basis points expansion in operating margins, and a 21% increase in earnings per share. Azure grew 38% year over year, surpassing Microsoft’s guidance. Despite Azure’s challenges, Microsoft’s residual performance obligations jumped 110% to $625 billion, indicating strong commercial demand. Microsoft executives cited supply constraints as a factor affecting Azure’s growth. Despite these challenges, Morgan Stanley believes Microsoft’s valuation fails to reflect its long-term growth potential. The firm maintains an overweight rating and $650 price target for Microsoft.

Read more at Yahoo Finance: Microsoft sends Wall Street a $625 billion message