Financial Performance Q3 FY2025
Revenue: $70.1 billion (+13% YoY)
Net Income: $25.8 billion (+18% YoY)
Earnings Per Share (EPS): $3.46 (+18%)
Return to Shareholders: $9.7 billion via dividends and stock buybacks.
Drivers of Growth
Microsoft Cloud & Azure
Cloud Revenue: $42.4 billion (+20% YoY), with Azure growing by 33% alone.
Intelligent Cloud Segment: Revenue of $26.8 billion (+21%), supported by hybrid solutions and AI-enabled services.
AI Innovations
Microsoft is aggressively investing in AI: partnerships with chip manufacturers like NVIDIA and the integration of AI tools (e.g., Copilot) into productivity software drive demand. Reports suggest that Microsoft could host Grok from xAI – another step to strengthen the ecosystem.
Market Reactions & Analyst Estimates
Stock Surge: Shares rose ~9% following the Q3 results, as the outcomes surpassed expectations and alleviated concerns over CAPEX cuts.
Valuation: As of May 2, 2025, at ~$435 with a 14% discount according to Morningstar – potentially attractive for long-term investors.
Strategic Positioning for Recession Resilience
CEO Satya Nadella emphasizes cloud-based solutions as key to navigating crises: through economies of scale and cost efficiency, Microsoft remains profitable even amidst macroeconomic challenges. Unchanged CAPEX plans until FY26 underline confidence in sustained demand for AI/Cloud services.
For tech investors, MSFT remains one of the most compelling values in the sector – combining stable revenue dynamics, leadership in innovation, and shareholder friendliness.