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Microsoft allayes market concerns by projecting rapid revenue growth

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Microsoft allayes market concerns by projecting rapid revenue growth

Demand for cloud computing services, which is driving Microsoft Corp.’s projection of double-digit revenue growth this fiscal year, sent shares up 5% on Tuesday.

The positive prediction, which comes as investors prepare for an economic slowdown with inflation raging and consumers cutting back on spending, demonstrates how Microsoft continues to profit from the pandemic-led drive to mixed work arrangements.

Microsoft’s estimate, according to Bob O’Donnell, an analyst for TECHnalysis Research, reveals that businesses are still shifting more work and business online despite the bad economic trends.

Regarding the forecast, he added, “I don’t think it’s specific to Microsoft.” Because of the variety of businesses it operates in and the crucial role that its software and computing services play for organisations, Microsoft is in an exceptional position.

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Microsoft’s fourth-quarter results came in slightly below expectations despite the optimistic outlook for the fiscal year that begins on July 1. This was due to a stronger dollar, slower PC sales, and reduced advertising expenditure.

Although Azure, Microsoft’s cloud service, saw record bookings during the quarter, according to Brett Iversen, general manager of investor relations at Microsoft.

Azure growth came in at 40%, falling short of Visible Alpha’s 43 percent analyst projection. If foreign exchange variables are taken out, it increased by 46%. Revenue increased by 20% to $20.9 billion in its larger Intelligent Cloud division, exceeding the average Wall Street projection of $19.1 billion, according to Refinitiv.

The Intelligent Cloud segment was anticipated to generate revenues for the first quarter ending September 30 ranging from $20.3 billion to $20.6 billion, with the upper end slightly above analysts’ expectations.

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“We are seeing larger and longer-term commitments,” CEO Satya Nadella said. “We also secured a record number of $100 million and $1 billion and beyond transactions this quarter. “We introduce 10 regions over the next year,” says one supplier, “and we have more data centre regions than any other.”

Microsoft is under pressure from a rising dollar since it generates nearly half of its revenue outside of the US. As a result, the business lowered its expectations for revenue and earnings for the fourth quarter in June. This year, shares of the Redmond, Washington-based corporation have decreased by nearly 25%.

In contrast to a 1% decline in the same period a year prior, the U.S. dollar index increased by more than 2% in the quarter that ended in June and by nearly 12% this year.

Iversen told Reuters that if it weren’t for the stronger currency, the company’s 12 percent year-over-year revenue increase would have been 4 percentage points higher. The fourth quarter’s revenue was down by three major causes by nearly $1 billion.

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Revenue was impacted negatively by foreign exchange by roughly $600 million. Windows OEM revenue was reduced by about $300 million as a result of the PC industry slump. And the decrease in advertising expenditure reduced the revenue from ads on LinkedIn, Search, and news by more over $100 million.

Because of their scale, Microsoft finds it difficult to remain independent of the state of the economy, according to John Freeman, vice president of equities research at CFRA Research. We have inflation, which will undoubtedly reduce consumer demand.

The company reported that weaker consumer demand also had an impact on gaming revenue, which decreased 7 percent year over year owing to a decline in Xbox hardware, content, and services. This quarter, it is predicted to shrink in the low to mid-single digits due to losses in first-party content.

Microsoft’s fourth-quarter sales was $51.87 billion, up from $46.15 billion in the same period last year. According to Refinitiv IBES data, analysts had projected revenue of $52.44 billion on average.

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For the quarter that ended on June 30, net income increased to $16.74 billion, or $2.23 per share, from $16.46 billion, or $2.17 per share, a year earlier.

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Surfaces of the Motorola Edge 50 Ultra with Snapdragon 8S Gen 3

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Surfaces of the Motorola Edge 50 Ultra with Snapdragon 8S Gen 3

Early this week, renders of the Edge 50 Fusion appeared, and Motorola has previously stated that the Edge 50 Pro will ship on April 3. The highest-end smartphone in the Edge 50 series, the Edge 50 Ultra, has now been shown in renders.

The phone is depicted in the renderings in peach fuzz and black with a vegan leather finish, while sisal, a beige color, will have a brushed surface. As opposed to the Snapdragon 7 Gen 3 in the Pro variant and the Snapdragon 6 Gen 1 in the Edge 50 Fusion, the phone is reportedly powered by the Snapdragon 8s Gen 3 SoC.

A 50MP primary camera, an ultra-wide camera, and a periscope telephoto camera with a 5x optical zoom are all included in the Motorola Edge 50 Ultra’s feature set. Additionally, there is a triple LED flash on the right side and a laser autofocus feature above the periscope lens.

Although the phone’s display, battery, and charging specifications are yet unknown, the Edge 50 Pro is said to include 12GB of RAM and support both 50W and 125W wired and wireless charging.

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It is anticipated that this will launch as the Motorola X50 Ultra in China. It is unclear if the India launch may be expected on the same day as the rest of the Edge 50 series phones, even if this is scheduled to go official on April 3.

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