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Microsoft reported its second-quarter numbers on Tuesday with both revenues and profits ahead of expectations. Revenue growth slowed to 7% for the full year, compared to 18% last year, and was the slowest rate in seven years. To be fair, it's been an exceptional run under CEO Satya Nadella.
Revenue was $56.2 billion for the quarter, and net income came in 20% higher than the year before, at $20.1 billion. Those are nice margins!
The cloud-computing business, including Azure, has experienced a growth rate deceleration, but still advanced by 26%. That's about the same rate of growth as the smaller Google Cloud. Microsoft has been cutting costs due to ebbing demand for digital services after the pandemic-driven surge.
There is considerable excitement about Artificial Intelligence (AI) based products in the pipeline. Microsoft remains at the forefront of the AI services boom, and the company recently announced plans to charge $30 per user for access to an AI-powered assistant for Microsoft 365.
Other business units such as Windows licensing and PCs, remained stable. That's the beauty of a truly multinational corporation with diversified operations.
The share price softened after these numbers, but is still up 41% year-to-date, outpacing the Nasdaq's 36% rise over the same period. This is a very big business, but this humpback can move!
