Microsoft shares fall after slight shortfall

New York
CNN Affairs
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Microsoft’s revenue jumped 12% in its most recent quarter, but was slightly below analysts’ expectations.

Microsoft

(MSFT) said on Wednesday its sales for the quarter ending in December reached $ 32.47 billion. This revenue growth was fueled in part by the company’s commercial cloud activity, which jumped 48% from the previous year to $ 9 billion.

The company’s shares fell more than 3% in after-hours trading following the quarterly report.

In recent years, Microsoft has focused on the cloud rather than its legacy business, Windows. The shift has put Microsoft at the forefront of the rapidly growing cloud technology segment after years of trying to compete in the market for smartphones and online services like search.

Microsoft Azure’s cloud service competes with Amazon Web Services, also known as AWS. Wedbush analyst Daniel Ives said the two companies were in a “fierce battle”.

“More and more businesses and governments around the world are spending billions on an accelerated transition to a cloud-based environment,” Ives wrote in a note to investors ahead of Microsoft’s earnings report, adding that Company research indicates that Microsoft is gaining market share over AWS.

“We believe Azure and AWS remain miles away from the nearest competitor, although we expect the competition to intensify significantly as more tech giants pursue this,” said Ives.

Earlier this month, Microsoft announced an agreement to become Walgreens’ new cloud provider, with the goal of taking on Amazon. Both companies said the move would help Walgreens gain personalized health data from its customers, which would allow pharmacists to deliver better and personalized nutrition and wellness solutions.

“Our strong cloud business results reflect our deep and growing partnerships with leading companies across all industries, including retail, financial services and healthcare,” said Satya Nadella, CEO of Microsoft, in a statement released with Wednesday’s earnings report.

Microsoft regained its title of the world’s most valuable company in the last quarter of 2018, in part by avoiding recent regulatory and hardware sales issues of its industry peers.