Published on 26 Apr 2024 on Benzinga
...Earnings - Fidelity MSCI Information Technology Index ETF (ARCA:FTEC), iShares Global Tech ETF...
The world's largest software maker — Microsoft MSFT — reported strong third-quarter fiscal 2024 results, beating earnings and revenue estimates. driven by strong demand for cloud and artificial intelligence offerings.
Buoyed by robust results, shares of MSFT jumped as much as 5% in after-market hours. Investors could tap the opportune moment in this software leader through ETFs having double-digit exposure to Microsoft. These are Select Sector SPDR Technology ETF XLK, MSCI Information Technology Index ETF FTEC, iShares Global Tech ETF IXN, Vanguard Information Technology ETF VGT and iShares Dow Jones US Technology ETF IYW.
Earnings per share came in at $2.94, beating the Zacks Consensus Estimate of $2.81 and were 20% higher than the year-ago earnings. Revenues grew 17% year over year to $61.9 billion, edging past the consensus estimate of $60.63 billion.
Intelligent Cloud revenues jumped 21% year over year. Sales of Office 365 Commercial and Dynamic 365 climbed 15% and 23%, respectively. Sales of the flagship Azure computing platform grew 31% year over year.
The software maker invested billions of dollars into AI in a bid to turbocharge its growth, particularly its cloud computing services, and is now reaping the fruits. About 7% of the increase in Azure revenues came from AI. Microsoft CEO Satya Nadella said on a call that 65% of Fortune 500 companies are using the Azure service that delivers OpenAI's technology to businesses. Demand for generative AI will continue to fuel Microsoft's cloud business.
Microsoft is now emphasizing AI transformation through its new offerings like Microsoft Copilot. "Microsoft Copilot and Copilot stack are orchestrating a new era of AI transformation, driving better business outcomes across every role and industry" Nadella said.
Microsoft expects revenues of $63.5-$64.5 billion for fiscal fourth-quarter 2024. The Zacks Consensus Estimate is pegged at $64.49 billion.