Microsoft shares jump after Q4 beat on strong cloud growth

Investing.com -- Microsoft reported quarterly results that beat Wall Street expectations on Tuesday, driven by continued growth in its cloud business, sending shares up more than 6% in after-hours trading.

The company posted fourth-quarter earnings of $3.65 per share, topping analysts’ average estimate of $3.37.

Revenue for the quarter jump 18% to $76.4 billion, above the $73.79 billion expected by the market.

Microsoft (NASDAQ: MSFT) said cloud revenue for the quarter reached $29.9 billion, while total Microsoft Cloud revenue climbed 27% to $46.7 billion.

Azure, the company’s flagship cloud platform, generated over $75 billion in revenue during the fiscal year, growing 34% annually, CEO Satya Nadella highlighted in its earnings press release.

Nadella said Azure growth was fueled by “demand across every industry and sector” as companies increasingly adopt AI-driven tools.

"This was a slam-dunk quarter for MSFT with cloud and AI driving significant business transformation across every sector and industry," Wedbush analyst Daniel Ives said.

Azure’s 39% year-over-year growth, which exceeded Street expectations of 34%.

Ives said Microsoft is entering a “new phase of monetization on the AI front” and maintained an Outperform rating with a $600 price target.

All major segments of the company topped forecasts.

The company said demand for AI and cloud services is fueling transformation across industries, with CFO Amy Hood highlighting that the company closed the year with a “strong quarter.”

Shares rose 6.2% to $545 in extended trading.

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