Microsoft (MSFT - Get Report) shares hit at a record high Thursday after the iconic cloud computing group blasted Wall Street forecasts in its third quarter earnings report and predicted further growth in the months ahead.
Microsoft said earnings for the three months ending in March, the company's fiscal third quarter, rose 20% from last year to $1.14 per share, well ahead of the Street consensus of $1.00, as gross profit margins in it commercial cloud business hit a staggering 63%. Group revenues rose 14% to $30.2 billion, Microsoft said, with each of its business units reporting year-on-year gains.
Intelligent Cloud revenue, which includes its Azure offering, rose 22% to $9.7 billion, a figure the company said could rise past $11 billion over the three months ending in June. Microsoft's productivity and business process division, which includes Linkedin, rose 14% to $10.2 billion and could hit $10.75 billion in the current quarter, Microsoft said.
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"Our trusted, extensible cloud platform spanning application infrastructure, data & AI, productivity and collaboration, as well as business applications enables every organization to create their own intelligent systems and experiences to compete and grow," he added.
Microsoft shares were marked 3.85% higher at the start of trading Thursday and changing hands at $129.83 each, after hitting a record high $130.40 each, a move that would extend the stock's year-to-date gain to around 28.2% and bring the market value of the Redmond, Washington-based tech icon past $1 trillion.
"With each passing quarter, we think Microsoft increases investor confidence in the durability of the business model," said BMO Capital Markets analyst Keith Bachman, who raised his price target on the stock to $147 per share with an outperform rating. "Thus, even as the multiple has expanded meaningfully, we believe the shares can move higher."