Microsoft became a strong quarter and broadcast excellent guidance.
Its Azure cloud computing unit re -directed 33%income growth.
Azure and Ai should continue to help drive the growth of the company that advances.
Only one ”Gorgeous“Actions were the performance of the S&P 500(Snpindex: ^GSPC) Last year, and that was Microsoft(NASDAQ: MSFT). However, after informing the strong results of Q3 and emitting excellent guidance, the software giant is on the way to a better 2025.
We look at the company’s most recent report and guidance to see if the actions can continue to meet and shoot their delay in 2025.
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Although it is best known for its software productivity tool suite, such as excel and word, as well as its Windows Personal Computer (PC) operating system, it is the company cloud computing Azure unit that has become its largest growth engine in recent years. This continued to be the case of last quarter.
For the third fiscal quarter, azure revenue increased by 33%, or 35% in constant coins. It marked the seventh consecutive quarter of 30% or more the growth of revenue in Azure and was above the previous forecast for growth between 31% and 32% in constant coins. The company accredited the capacity that occurred online faster than expected, although it said that it saw an overcoming in its non -(artificial intelligence) business. In the meantime, Ai Services represented almost half of the overall growth of azure.
General “Cloud Intelligent”, where Azure is located, increased by 21% year to $ 26.8 billion. Github also continues to be a great contributor to this segment, with GitHub Copilot users who went on a year -on -year quadruple to more than 15 million users.
In front, the company forecasts that Azure revenue will grow between 34% and 35% in constant coins in the first fiscal quarter, driven by a strong demand for its service portfolio. He said that the demand is currently growing a little faster than expected, which will lead to some capacity restrictions after June.
Microsoft is planning that its tax budget of capital 2026 (CAPEX) is higher than the prosecutor 2025, but that it grows at a slower pace. He plans to invest in a larger combination of short -term assets, which he said will be directly correlated with the income than long -term assets. This essentially means that it plans to invest more in things like servers and graphic processing units (GPU) the next exercise, unlike real estate buildings and the data center.
Image Source: Getty’s pictures.
Microsoft’s other segments, productivity and business processes, where Microsoft 365 and Linkedin reside, saw that revenue increased by 10% year -on -year to $ 29.9 billion. The growth was solid between its four main solutions of the segment.
Microsoft 365 Commercial
Microsoft consumer 365
Linkedin
Dynamics
Growth of income
11%
10%
7%
11%
Data source: SEC files.
Microsoft said that the adoption of Microsoft 365 COPILOT client has tripled year after year and that the sizes of the agreement are still growing. He added that a record number of customers bought more places again in the quarter. In the meantime, its cloud -based business application platform, Dynamics 365, continued to see a strong adoption.
Revenue in its “more personal computer” segment, Windows and Xbox home, increased 6% year -on -year to $ 13.4 billion. His search and news advertising business, which is also part of the segment, led the road with a 21%income growth. The company said that growth was driven by the use of third -party collaborations. In the meantime, Windows OEM revenue and devices increased by 3%.
Total Microsoft income increased by 13% to $ 70.1 billion, and ACTION results (EPS) jumped by 18% to $ 3.46. The results exceeded the consensus of the analyst, which is calculated by income of $ 68.4 billion and $ 3.22 in EPS, as collected by Lseg.
For his first fiscal quarter, Microsoft foreseen revenue from $ 73.15 billion to $ 74.25 billion, which exceeded $ 72.26 million.
After delaying his magnificent seven colleagues last year, Microsoft seems to continue its solid growth in the coming years. Azure has proven to be a cloud -class playful. The company is growing carefully to meet the demand, without moving too much. This is a smart movement.
In the meantime, their other businesses continue to experience solid growth. Copilot 365 is still a good opportunity, but the company must also continue to improve and innovate in this area. The AI world moves quickly and is still the game of anyone to win.
Actions are now contributed with a proportion of prices for earnings (p/e) of less than 29 based on the estimates of 2026 tax analysts. It seems to be a fair assessment, but certainly is not a bar price.
As such, I think Microsoft is a solid stock to have long -term, but it would not necessarily pursue it after its strong earnings.
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Geoffrey Seiler It has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Microsoft. The Motley Fool recommends the following options: January Long of 2026 $ 395 Calls to Microsoft and brief January 2026 $ 405 calls to Microsoft. The mold’s fool has a Outreach policy.
