Cloud business is doing well
Microsoft’s turnover breaks the 50 billion mark
01/26/2022, 00:52
Microsoft earned more than expected in the second quarter thanks to the strong cloud business. Nevertheless, in a first reaction to the numbers, the share fell by around 5 percent. Some investors would have expected even stronger growth in the cloud division.
The trend towards hybrid working brings brilliant business to Microsoft. From October to December, sales climbed by a fifth to $51.7 billion, as the world’s largest software company announced on Tuesday after the stock market closed. Microsoft breaks the $50 billion mark for the first time.
The cloud division with its Azure offering stood out in particular, but its growth did not meet the high expectations of analysts. Like Amazon and Google, Microsoft is benefiting from the fact that employees, schoolchildren and students are increasingly working from home during the Corona crisis. For this to work, both companies and private individuals need storage space and applications in the cloud that everyone can access from anywhere.
Microsoft’s profit increased by 21 percent to 18.8 billion dollars. That could not convince investors after the trading day. The stock fell about five percent. The stock is down around 16 percent since hitting a record high in November, due on the one hand to the recent sell-off in tech stocks on Wall Street and on the other to the announcement that it intends to acquire call-of-duty developer Activision Blizzard for $69 billion .
It is true that Microsoft has long been an integral part of the working world with Windows, Office and teams. With the takeover, however, the group is betting on the metaverse that is just emerging – a virtual world accessible via various devices and platforms, which is intended to merge online and offline. The acquisition of Activision Blizzard would make the XBox provider the world number three in the computer games industry behind Asian rivals Tencent and Sony. Investors and analysts are wondering whether the very expensive acquisition will pay off. Recently, however, Microsoft had a lucky hand – as with the takeovers of LinkedIn or Skype.