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Microsoft reaches $1tn in value, predicts cloud growth with Azure

Microsoft Azure, Amazon Web Services, Apple

Microsoft expects Azure to bring in $13.5 billion in sales in fiscal 2019

Microsoft announced strong growth in its value, with the company’s valuation reaching $1 trillion for the first time. The announcement comes right after executives predicted consistent growth in its cloud business.

The company’s shares jumped 4.4 percent to $130.54 after a conference call with investors in an effort to push the company to the forefront ahead of Apple’s $980 billion market capitalisation. So far, Microsoft’s stock has increased 23 percent, after reaching a record high of $125.85 during regular trading hours, Reuters reports.

Microsoft’s flagship cloud product Azure is in direct competition with Amazon Web Services.  Chief Financial Officer Amy Hood said that Microsoft expects to see tremendous growth in value in the fiscal fourth quarter.

With Azure, Christopher Eberle, a senior equity analyst with Nomura, said “one should assume a slower rate of growth as we move forward, simply due to the law of large numbers”. He estimated Azure to bring in $13.5 billion in sales in fiscal 2019, resulting in an overall growth rate of 75 percent. “I can’t name another company of that scale growing at these rates,” he added.

For the third fiscal quarter ended March 31, Azure experienced a slow down in growth rate of 73 percent down from 76 percent in the second quarter. Microsoft’s head of investor relations Mike Spencer said the decline in growth was close to the company’s estimation.

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