Shares of the software and services giant fell as much as 6% on Tuesday after reporting lackluster growth in its cloud business. But they bounced back to https://www.reuters.com/article/instant-article/idUSL4N2U548J after Microsoft set a higher growth target than the Wall Exchange for the current quarter, erasing earlier after-hours losses. negotiation to trade at 3% above the closing price.
Executives forecast revenue of $18.75-19 billion for Microsoft’s Intelligent Cloud unit in the third quarter, versus a Wall Exchange consensus of $18.15 billion, according to Refinitiv data.
“We think this can start to change the tide of sentiment in technology,” said David Wagner, portfolio manager at Aptus Capital Advisors. Microsoft’s forecast was “strong and robust and we hope it will allay the stock market’s concerns about the earning power of tech companies,” he added.
The figures for the quarter ended December played on the fears of investors in the technology sector, who feared a slowdown in the growth of the “cloud” activity, one of the strongest in the industry segments. technological.
Confidence in Microsoft’s future, coupled with better-than-expected revenue for the second quarter, helped counter the backlash against tech stocks that led to stock price swings.
Brent Thill, an analyst at Jefferies, said the cloud acceleration and business reservations highlighted by Microsoft CFO Amy Hood helped “save the Nasdaq.”
Accelerating constant-currency growth for Azure – Microsoft’s flagship cloud computing offering – coupled with strong demand will likely be reflected in upcoming financial reports from Microsoft rivals Amazon.com Inc and Google. Alphabet Inc, Mr. Thill added.
“I really think investors should feel confident and you saw that in the stock rally after the management commentary and then the guidance,” Bernstein analyst Mark Moerdler said.
Azure’s anticipated growth validates the strength of the company and the sustainability of all-cloud growth, Moerdler said.