Microsoft posts stronger than expected Q3 Result, shares climb
Microsoft Corp. reported better-than-expected results for its latest quarter, leading to an initial rise in share prices despite concerns that economic issues could reduce demand for the company's software and cloud services.
Revenue for the three months ending in March increased by 7% compared to the previous year, while net income rose by 9%, exceeding market forecasts. However, growth in the cloud computing business, which has driven Microsoft's expansion in recent years, has slowed down.
For several months, Microsoft executives had been indicating to investors that the company's cloud business would be affected by a slow economy. CEO Satya Nadella cautioned that many of their cloud customers were seeking ways to reduce their overall cloud computing costs.
Azure cloud computing revenue rose by 27% in the latest quarter, in line with analyst expectations. Microsoft has invested heavily in OpenAI, the company behind the viral chatbot ChatGPT, but the use of generative AI is unlikely to boost sales significantly at this stage. Despite the positive results, Microsoft expects sales of its Windows operating system and office software to slow as personal computer sales decline.