Microsoft Reports Strong Earnings On Cloud Computing

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Microsoft sees strong quarterly earnings



Microsoft beat market expectations on Tuesday by delivering a strong quarter-end performance in cloud computing and software, while benefitting from the pandemic's internet-based shifting of work, play shopping, and learning.



The US tech giant, which announced last Wednesday a huge deal to acquire gaming giant Activision Blizzard in a blockbuster deal, announced that its profit increased to $18.8 Billion during the last three months of the fiscal year.



CEO Satya Nadella stated that digital technology was the most flexible tool that could overcome limitations and reinvent the way we work and live, announcing the company's revenue of $51.7 million.



Microsoft investments include investing in the growing videogame market , and by extension, the metaverse. This is the virtual real-world vision for the future of the internet.



On an earnings call, Nadella pointed to the millions of players playing games such as Forza, Halo and Minecraft, many of whom are investing in "avatar" proxy services for online worlds, saying that the metaverse is an natural extension.



Microsoft is also meshing virtual gathering features with non-game products, like Teams online collaboration software, according to executives.



"We feel very well positioned to be able to take advantage of what I believe to be the next generation of the internet," Nadella said on the call.



Last week the Redmond Washington-based tech company announced an important deal to acquire scandal-hit Activision's "Call of Duty" maker for $69 billion.



This would be the largest buyout ever by Microsoft and is far ahead of LinkedIn in 2016 when it was bought for $26.2 billion.



Revenue at the career-focused social network was up 37 percent compared with the same quarter the year before as per the earnings report.



Acquiring the troubled , but successful Activision will make Microsoft the third-largest gaming company by revenue, behind Tencent and Sony, Microsoft said. Minecraft java



The merger proposal is subject to regulatory approval at a moment when Europe and the United States are seeking to rein in Big Tech.



Revenue in the Microsoft division that makes Xbox consoles and video game content grew 10 percent in the recently ended quarter, according to the earnings report.



- 'PC renaissance' -



"Redmond is still seeing growth in the field as a lot of enterprises continue to make the shift to the cloud with Nadella & Co," Dan Ives, Wedbush analyst wrote in a note to investors.



Ives noted the strong earnings from Microsoft as a "broader indicator of the strength we expect to see across the cloud computing landscape for enterprises throughout this earnings season."



Microsoft competes with Amazon and Google in the cloud computing market.



According to the earnings report, each of the units focused on cloud services at Microsoft saw double-digit revenue growth and earned tens of billions of dollars.



Microsoft's division dedicated to the Windows operating system also flourished on what Nadella referred to as a "renaissance" of the personal computer (PC) market, which was in decline prior to the pandemic forced a lot of people from all over the world to stay at home.



"More than ever people are turning to computers to exercise their power and unleash their imagination," Nadella said.



"We are witnessing a PC Renaissance with a rise in the amount of time spent on PCs and per household."



Microsoft stock was up slightly following the earnings call.



Some of the more bullish investors had hoped for better financial results, as per Wedbush.



Ives said that "In this jittery marketplace we will see every print first viewed through glass half empty, however in the end, this is a core name to own."



Scott Kessler, vice president of Third Bridge, was one of the analysts who wanted to find out how stopping the epidemic would affect Microsoft's expansion, which is fuelled by remote work and play.



Kessler wrote in an article that "we've seen many darlings from the early Covid period become fallen angels."



Nadella believed that digital technology would continue to be a valuable resource as people "reimagine" their lives and society searches for solutions to problems like the shortage of labor.



"We are living though the shift of generations in our society and economy," Nadella said. Minecraft java