$Microsoft(MSFT.US)Context: Microsoft reported earnings: Revenue was $92.3bn (+19% YoY), about 2% above consensus. OP re…
$Microsoft(MSFT.US)
Context: Microsoft reported earnings: Revenue was $92.3bn (+19% YoY), about 2% above consensus. OP reached $45.9bn (+21% YoY), about 5% ahead of consensus.
OPM was 49.8% (+90bps YoY), supported primarily by cost discipline. Azure revenue was $33.17bn (+48% YoY), vs. guidance of 44%–45%. More importantly, 2Q growth is guided to 49%–50% ex-FX, implying continued acceleration. Microsoft showed investors that it's able to grow rapidly while keeping spending in check. Microsoft's stock is rising while Alphabet's is falling, showing how investors are paying more attention to whether AI spending is paying off. This was the first quarter in which Microsoft broke out the revenue contributions of its Azure cloud-computing business in absolute terms.
My Trade: Glad that the stock is rising and Azure is finally paying off. I'm still in the long game for Microsoft so no big changes.
Takeaway: Microsoft's earnings proved that Capex and cash flow remain vital to investors - in contrast Alphabet's second straight quarter of negative cash flow has led to the stock dropping 9% after hours, potentially even more when trading starts later. @Captain's Treasure
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