Microsoft beats Wall Street estimates for the quarter but gives soft guidance
Microsoft (MSFT.us) delivered $2.93 EPS on a revenue of $62.02 billion for the quarter ended 31 December 2023. This is ahead of Wall Street estimates of $2.77 EPS and $61.1 billion. In effect, the company's earnings increased 33% on a year-over year basis and sales increased by 18%.
Amy Hood, Microsoft's CFO, said that "Strong execution by our sales teams and partners drove Microsoft Cloud revenue to $33.7 billion, up 24% year over year."
CEO Satya Nadella was positive about the company's AI integration. Nadella said that "We've moved from talking about AI to applying AI at scale." and "By infusing AI across every layer of our tech stack, we're winning new customers and helping drive new benefits and productivity gains across every sector."
The top performer for the quarter was Microsoft's Intelligent Cloud business unit. Revenue here jumped by 20% to $25.9 billion. Azure cloud infrastructure was a standout performer with sales increasing by 30% year-on-year.
The Productivity and Business Process unit's revenue was up 13% to $19.2 billion, and the Personal Computing unit's sales increased by 19% to $16.9 billion.
Microsoft forecasts revenue between $60 billion and $61 billion for the current quarter. However, the median, $60.5 billion is below Wall Street estimates of $61 billion.
Source: www.tradingview.com
On a technical basis, MSFT.us is overbought with its RSI above 80 (green rectangle). This suggests a pullback may be due in the short-term as the oscillator normalises. However, given the strong primary uptrend, any short-term pullback may be an opportunity for the bulls to enter at a lower price.
Image by Gerd Altmann from Pixabay
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.