Microsoft: Not Much Excitement

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Despite announcing a decent 12% growth in revenue in the second quarter of its fiscal year, Microsoft stock price fell by more than 2% on Wednesday. Investors are not excited about this measly growth. Microsoft’s More Personal Computing Department which includes all Windows devices and gaming and advertising grew by 2%. Beating analysts estimated prediction of US$12.02 billion in revenue to close at US$12.17 billion.

Gaming revenue was up 8%, however, even with this increase Microsoft Xbox gaming console still trails behind the PlayStation gaming console from Sony.  Other segments such as Productivity and Business grew by an impressive 25% with revenue of USS$8.95 billion, above the estimated US$8.86 billion. While the Intelligent Cloud segment which consists of Azure, Windows Server and SQL Server grew by 15% to close at US$7.80 billion in revenue, still surpassing the estimate US$7.51 billion in revenue.

The cloud computing service of Microsoft, Azure, doubled in sales as businesses seem to prefer to store data and run applications in Microsoft Data Centers. Azure’s revenue was up a whopping 98%. With such a positive response from customers, Microsoft is now looking at ways to improve Azure to better compete or even to surpass the performance of their competitor Amazon. Microsoft announced that it will be adding machine learning and data analysis features to Azure. Additionally, in an effort to continue to improve its Office 365 service, Microsoft will be switching some customers to an online subscription version of programs such as Word and Excel.

Even though Microsoft’s performance this quarter may be lacking in zeal, it is important to note that the Microsoft stock price has increased by an estimated 10% since the beginning of the year and many investors still believe the stock is worth holding onto as it has been consistent over the years.

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