Microsoft reported a profit of $18.8bn for the last three months of 2021, ahead of analysts expectations, but its share price initially slumped over 5% after another rocky day on Wall Street.
The Seattle-based software giant reported revenues of $51.7bn, an increase of 20% compared to the same period last year and ahead of expectations. But the news was not enough to impress investors who appear to have soured on the tech sector after a historic boom in share prices during the pandemic.
Microsoft is the first of the biggest US tech companies to report quarterly earnings with Apple, Amazon, Meta and Alphabet to come. The reports are being closely watched after Netflix’s share price collapsed following the release of disappointing subscriber numbers.
Since Netflix’s fall, stock markets have gyrated wildly. Investors are concerned about the Federal Reserve’s plans to raise interest rates and escalating tensions between Russia and Ukraine.
Microsoft’s cloud computing business benefitted from the shift online during the pandemic as Covid-19 closed down offices across the world. Satya Nadella, chairman and chief executive officer of Microsoft, said he expected the trend to continue.
“Digital technology is the most malleable resource at the world’s disposal to overcome constraints and reimagine everyday work and life,” said Nadella. “As tech as a percentage of global GDP continues to increase, we are innovating and investing across diverse and growing markets, with a common underlying technology stack and an operating model that reinforces a common strategy, culture and sense of purpose.”