Microsoft Q4 revenue beats estimates on cloud growth

Overview

• US technology giant's Q4 revenue rose 18%, beating analyst expectations

• Adjusted EPS for Q4 rose 23% year-over-year

• Results boosted by $3.2 bln Anthropic gain and lower retirement expenses, partly offset by Xbox charges

Outlook

• Microsoft did not provide specific guidance in the press release

Result Drivers

• CLOUD GROWTH - Microsoft Cloud revenue rose 27% year-over-year, with Azure and other cloud services revenue up 43%

• AI ADOPTION - Microsoft 365 Copilot reached over 30 mln paid seats, reflecting customer demand for AI-powered solutions, per CEO Satya Nadella

• SEGMENT WEAKNESS - More Personal Computing revenue fell 4% as Windows OEM, Devices, and Xbox content and services revenue declined

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 59 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for Microsoft Corp is $550.00, about 39.8% above its July 28 closing price of $393.35

• The stock recently traded at 20 times the next 12-month earnings vs. a P/E of 20 three months ago

Reuters Recommended Reads

• July 29 - Microsoft set for $190 billion market value swing after earnings results, options indicate

• July 28 - Manhattan Associates Q2 results beat on cloud demand

• July 28 - Amazon winds down most flagship AI models in strategy overhaul, Business Insider reports

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)