By Deborah Mary Sophia, Stephen Nellis and Aditya Soni
(Reuters)-Microsoft's view on Wednesday's stronger than expected quarterly growth for its Azure cloud computer business after shots blow out in the latest quarter, silencing investors is worried in an uncertain economy and raises its shares 7% after hours.
Microsoft results, which follow similar results from Google last week, could ease concerns about the potential slowdown of AI demand, after some analysts highlighted the canceling of data center leases in Microsoft as a sign of excess capacity.
Investors had also been concerned about the result of sweeping US tariffs that encourage businesses to re -spend, but robust advertising sales on Meta platforms suggested that that is not yet happening.
The increase in Microsoft's shares sets it on track to add more than $ 200 billion to its value.
Microsoft said revenue in its Azure Cloud department rose 33% in the third quarter ending March 31, exceeding estimates of 29.7%, according to visible Alpha. AI contributed 16 percentage points to the growth, up by 13 points in the previous quarter.
The company also predicts cloud computer revenue growth from 34% to 35% on the basis of constant cash for the fourth financial quarter to between $ 28.75 billion and $ 29.05 billion, well above the analysts' estimates, according to data from visible alpha.
The growth of commercial orders – reflecting new infrastructure and software contracts signed by business customers – rose 18% in the third -quarter of fiscal, partly driven by a new Azure contract with the creator of Chatgpt Openai. Microsoft refused to comment on the size of the deal or what role it played in the overall Azure sales growth.
However, Amy Hood, Microsoft's Chief Financial Officer, told on -call investors that the AI contribution to the cloud computer business was in line with the company's expectations, while “the real performance in Azure this quarter in our non -AI business.”
“So the only real face we saw on the side of the business was that we were able to provide early supply to many customers,” said Hood.
The company's Azure results came after several Wall Street analysts reduced expectations as research reports said Microsoft had ended the data center's leash obligations.
CEO Satya Nadella said on the call of a conference that Microsoft had a long history of constantly modifying its data center plans, but analysts had only begun to scrutinize those movements in recent quarters.
“The numbers were skeptical going in, giving them the room to beat quite heavily. The beat would not have been so big if we didn't have all these problems,” said Dan Morgan, senior portfolio manager at the Synovus Trust, referring to tariff uncertainty.