Why Microsoft Stock Was Moving Higher Today
Shares of Microsoft (NASDAQ: MSFT) were climbing today after the enterprise tech company delivered another strong earnings report, showing it was capitalizing on the opportunity in artificial intelligence (AI) and executing across the board.
As of 2:24 p.m. ET on Friday, the stock was up 2.3%.
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Microsoft shines again
Microsoft has already been a big winner in the AI boom, but the Windows maker's third-quarter earnings report showed it could live up to high expectations.
Revenue in the quarter jumped 17% to $61.9 billion, which easily beat estimates at $56.8 billion. Growth was driven by the intelligent cloud segment, where revenue was up 21% to $26.7 billion. And the cloud infrastructure business Azure, which is contained within intelligence cloud, grew 31%.
Other standout categories included Dynamics products, which was up 19% with Dynamics 365 revenue up 23%, and Xbox content and services revenue, which jumped 62%, though nearly all of that growth was due to the acquisition of Activision Blizzard.
On the bottom line, the company gained leverage across its operating costs, and operating income jumped 23% to $27.6 billion. Earnings per share rose 20% to $2.94, which was well ahead of the consensus at $2.63.
CEO Satya Nadella talked up the company's growth in AI, saying, "Microsoft Copilot and Copilot stack are orchestrating a new era of AI transformation, driving better business outcomes across every role and industry."
What's next for Microsoft
Microsoft gave solid guidance for the fiscal fourth quarter calling for revenue of $63.5 billion to $64.5 billion, which was slightly below the consensus at $64.5 billion.
The company also gave some insight into fiscal 2025, calling for double-digit revenue growth but operating margins down a percentage point.
Overall, Microsoft remains in the driver's seat in the artificial intelligence race thanks in part to its partnership with OpenAI. And it said near-term demand for AI is a bit higher than capacity, indicating more growth ahead.
While the stock is expensive, Microsoft continues to show why it deserves to trade at a premium.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
