Microsoft reported strong earnings with Azure revenue growth expected to accelerate, positive news for stock.

From Morningstar: 2024-07-31 06:40:00

Microsoft reported a good quarter, leading to an increase in their fair value estimate per share to $490. Azure revenue is expected to accelerate in the second half of the year. Revenue increased by 15% year over year to $64.73 billion, driven by strong performance in intelligent cloud and productivity and business processes.

Commercial bookings grew 19% year over year, with Microsoft positioning itself as a leader in AI. Azure revenue grew 30% year over year, despite being capacity-constrained. Dynamics, office, and Copilot add-ons contributed to solid performance. Teams now has over 3 million premium seats.

The Activision acquisition contributed to revenue outperformance, with notable success seen in Diablo 4 being added to Game Pass. Margins remained in line with expectations, with Microsoft making significant data center capacity investments. Microsoft expects double-digit revenue growth and a decline in operating margin for the full year.



Read more at Morningstar: Microsoft Earnings: Cloud Growth to Accelerate This…