Microsoft Corp. became even more deserving of its $800 billion-plus valuation Thursday by showing strong growth and projections for more, but the 43-year-old software giant can’t rest now if it wants to maintain its seat at the table with other tech giants.
Microsoft MSFT, -0.68%[1] reported fiscal fourth-quarter earnings that surpassed Wall Street’s expectations[2] Thursday, and surpassed the $100 billion annual revenue mark for the first time, topping $110 billion to boot. At an age when growth is hard to come by for most tech companies, Microsoft reported double-digit revenue growth across all its businesses except for Office consumer products, which was up 8%. The star again was its Azure cloud business, continuing its tear with revenue growth surging 89% in the quarter.
The company’s shares, up about 22% this year compared with a 4.9% gain in the S&P 500 SPX, -0.40%[3] jumped further in after-hours trading, after Chief Financial Officer Amy Hood predicted[4] the company would have slightly better revenue growth than Wall Street had forecast for the first quarter of its new fiscal year.
All of those numbers show how the conversation around Microsoft, which had grown as stale as the company, has changed under Chief Executive Satya Nadella. There was even a debate Thursday on CNBC[5] about whether Microsoft is a “growth stock” that should be included with the so-called FAANG stocks (Facebook Inc. FB, -0.61%[6] Amazon.com Inc. AMZN, -1.63%[7] Apple Inc. AAPL, +0.78%[8] Netflix Inc. NFLX, -2.91%[9] and Google parent company Alphabet Inc. GOOG, -0.75%[10] GOOGL, -1.14%[11] GOOGL, -1.14%[12] two of which are fast approaching $1 trillion in market cap[13]...