Shares of Microsoft (MSFT) traded about 8% higher in after-hours trading after the tech giant closed its fiscal fourth quarter on a strong note, fueled by rising demand for cloud and AI services. Earnings per share (EPS) of $3.65 climbed 24% year-over-year and easily topped consensus estimates of $3.38.
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Also, Q4 revenue totaled $76.4 billion, which was ahead of the $73.8 billion estimated by analysts. Overall sales were up 18% from a year earlier.
CEO Satya Nadella credited the company’s strong growth to its investments in AI and cloud infrastructure. “Cloud and AI is the driving force of business transformation across every industry and sector,” Nadella said. Further, he highlighted that Azure surpassed $75 billion in annual revenue, up 34% across all workloads.
For Fiscal 2025, Microsoft reported a 15% year-over-year jump in revenue to $281.7 billion along with an EPS of $13.64, up 16%.
Segment-Wise Performance
MSFT reported strong growth across all three of its core business segments. Intelligent Cloud revenue surged 26% to $29.9 billion, driven by a 39% increase in Azure and other cloud services.
Further, Productivity and Business Processes revenue climbed 16% to $33.1 billion, led by an 18% gain in Microsoft 365 Commercial cloud and 23% in Dynamics 365. LinkedIn also contributed with a 9% increase, reflecting ongoing momentum in professional networking and talent solutions.
At the same time, More Personal Computing revenue rose 9% to $13.5 billion, aided by a 13% jump in Xbox content and services and a 21% boost in search and news advertising.
Is MSFT Stock a Buy?
Turning to Wall Street, MSFT stock has a Strong Buy consensus rating based on 30 Buys and three Holds assigned in the last three months. At $558.71, the average Microsoft stock price target implies 8.86% upside potential.
