Microsoft (MS), the world’s largest software company, continued its high performance in the fourth quarter thanks to the strong growth of its cloud business. However, stock prices weakened despite favorable performance due to worsening investor sentiment in overall technology stocks.
According to Reuters on the 25th (local time), Microsoft’s sales in the fourth quarter of last year rose 20% from the same period last year to $51.7 billion, and its net profit rose 21% to $18.8 billion.
This exceeded Wall Street’s consensus (average earnings forecast) of $50 billion and net profit of $17.4 billion, compiled by financial information company Factset.
In terms of net profit per share, it was $2.48, an increase of 22% compared to the same period last year. This is also an increase from the Wall Street estimate of $2.31.
The cloud business, the main source of revenue, drove its performance with high demand, and Game Entertainment’s performance, which threw a winning move with the acquisition of Activision Blizzard, also showed an upward trend.
Sales related to “Azure” and other cloud services increased 46% from the same period last year, and sales of video game Xbox contents and services also increased by 10%.
Microsoft predicted that the cloud business will continue to be strong for the time being due to telecommuting and the spread of non-face-to-face culture after the COVID-19 pandemic. Microsoft is the world’s second-largest cloud operator after Amazon, with a market share of 20%.
The cloud service market is one of the fastest-growing markets in the IT field. According to market research firm International Data, it is expected to grow from $385 billion last year to $809 billion by 2025.
Microsoft has decided to acquire Activision Blizzard, North America’s largest game company, for $68.7 billion, the highest ever in Microsoft’s acquisition transaction, throwing a new winning move in the game entertainment business.
Once the acquisition is completed, Microsoft will become the world’s third-largest game company after China’s Tencent and Japan’s Sony. Microsoft’s strategy is to aim for a “game version Netflix” by releasing a large number of popular games by Activision Blizzard, including three PC online games such as Diablo, Warcraft, and Starcraft, on its game subscription service “Game Pass.”
Meanwhile, despite favorable performance, Microsoft shares listed on the MINASDAQ closed at $288.49, down 2.66% on the same day due to worsening investor sentiment in overall technology stocks.
