Volish sales of its flagship cloud product doubled in its first quarter, propelling earnings above analysts’ estimates and sending its shares to an all-time high, breaking past a level hit in 1999 at the peak of the tech stock bubble.
Microsoft shares have doubled since August 2013 with Chief Executive Satya Nadella restoring investor confidence by focusing on mobile and cloud computing rather than PCs.
Sales from its flagship cloud product Azure, which businesses can use to host their websites, apps or data, rose 116 percent. Revenue for its broader “Intelligent Cloud” business rose 8.3 percent to $6.38 billion, beating analysts’ average estimate of $6.27 billion.
The company forecast that sales for its Intelligent Cloud business will be between $6.55 billion and $6.75 billion in the current quarter, compared with $6.34 billion in the same period a year earlier.
Microsoft was one of the first to invest in cloud technology, which made a change from its usual business method of waiting until something was established.It found itself outflanked by Google on the Internet and Apple in consumer technology, as PCs became more robust and did not need upgrading.
Earlier this year, Nadella made headlines when he orchestrated Microsoft’s biggest-ever deal, agreeing in June to buy the social network for professionals LinkedIn for $26.2 billion.
Revenue in the unit that includes Windows software and the company’s struggling mobile business fell 1.8 percent to $9.29 billion. Microsoft forecast the division will have sales of up to $11.6 billion in the current quarter – well below the $12.7 billion it posted for the unit a year earlier.
Microsoft reported revenue of $22.33 billion, above the average estimate of $21.71 billion.