Proactive Investors - Microsoft Corporation (NASDAQ:MSFT) shares have surged Wednesday after the company cruised past expectations, and its cloud revenue growth caught the attention of analysts at Wedbush.
The firm reiterated its Outperform rating and raised its price target to $325 from $315 in a note to clients. The stock climbed more than 7% to $296 on Wednesday morning.
“With the uncertain macro playing out and Street worries heading into the print, Nadella & Co. delivered another masterpiece cloud quarter,” analysts said. “…Microsoft beat across the board with all eyes on Azure [cloud computing] growth of 31% handily beating the Street's 27% and whisper numbers of 28%.”
Microsoft reported fiscal third-quarter revenue of $52.86 billion, up 7% year-over-year and beating expectations of $51.02 billion. Earnings were $2.45 per share, up 10% from last year and ahead of the $2.23 per share projected by analysts.
“Cloud growth and the overall outlook for the June quarter was solid and much better than feared given recent noise in the market and will be music to the ears of investors this morning digesting results,” analysts said.
“In a nutshell, Nadella is taking Microsoft to the next level of growth as the cloud narrative is humming despite a cautious macro, the AI story is still in the first inning of playing out as ChatGPT at Microsoft is leading this tech AI arms race, and it appears the Activision deal should close over the coming months despite a bumpy path to get here.
“We walk away from this quarter even more bullish on the Microsoft story.”