The guidance of Microsoft in Azure is building up confidence among investors that the cloud business is going to be strong amid impressive demand. The segment is in a growing phase now and the path paved for the future seems strong.
Microsoft's revenue forecast is between $18.75 billion and $19 billion for the Intelligent Cloud for the third fiscal quarter. It is based on the strong growth of the platform. Experts believe the growth could be about $18.15 billion in the same period.
The upcoming results of Alphabet and Amazon could benefit the cloud computing business of Microsoft with respect to momentum.
Meanwhile, the American multinational has a revenue forecast between $14.15 billion and $14.45 billion from its computing unit in the third quarter. The Wall Street consensus for the same is $13.88 billion. The productivity process and business process together are expected to generate a revenue from $15.6 billion to $15.85 billion, nearly the same as expected by experts with a target of $15.72 billion.
The growth rate of Azure was 60 percent in 2020, but the same momentum was not witnessed in the following year. In the second quarter of this year, its revenue growth percent was 46 percent and similar to the expectations of Visible Alpha.
Microsoft is a valuable company on the global platform and mainly due to its corporate software, Outlook email and Office 365. During the COVID-19 pandemic, its products gained demand due to the work-from-home trend. The demand for Azure and cloud services of rivals including Alphabet and Amazon jumped high.
The net income of Microsoft jumped to $18.77 billion from a year ago when it was $15.46 billion. The share price increased from $2.03 to $2.48.
Microsoft stated the revenue in the last quarter of 2021 increased to $51.73 billion from $43.08 billion for the same period in 2020.