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Microsoft hits new high as home working sends cloud demand rocketing

Azure, Microsoft's server business, saw revenues jump by 50%

Microsoft Corporation - Mircrosoft hits new high as home working sends cloud demand rocketing
The tech giant was also bullish about the current quarter

Microsoft Corp (NASDAQ:MSFT)  got the tech giant reporting season off with a bang as it smashed forecasts for its second quarter, sending its shares to an all-time high.

The software giant saw its revenues jump by 17% to US$43.1bn in the three months to end December 2020,  with net income 33% higher at US$15.5bn as people working from home boosted activity in all areas of its operations.

Analysts had predicted revenues to grow by around 10% and the better than expected sales sent shares in the tech titan up by 6% to a new record in after-hours trades overnight.

Satya Nadella, Microsoft chief executive, was also bullish about the current quarter and forecast that sales would be between US$40.35bn and US$41.25b, growth of around 17% again.

"What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry," he said.

Microsoft has been revitalised by its cloud platform Azure and revenues in this business jumped by 50% in the quarter as businesses rushed to go digital as coronavirus lockdowns force staff to work from home.

Total cloud revenues rose by 23% to US$14.6bn.

Demand for home entertainment was also buoyed by people at home with the new Xbox games console lifting gaming hardware sales by 86% in spite of chip supply issues, helping personal computing revenues to rise by 14% overall to US$15.1bn.

Business and productivity rose by 23% to US$14.6bn, with the Dynamic 365 arm seeing a 21% rise as businesses used more teleconferencing and online tools while Linkedin’s revenue increased by 23%.

Amy Hood, Microsoft’s chief financial officer, said the second-quarter improvement was driven by continued customer demand, with stronger-than-expected consumption "as customers have increased their focus on digital transformation”.

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NASDAQ:MSFT
Market: NASDAQ
Market Cap: $1.72 trillion
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