Microsoft (MSFT, Financial) has reported stable performance in its first fiscal quarter, with total revenue increasing by 16% year-over-year to $65.6 billion. This figure exceeded market expectations of $64.5 billion. The positive results were driven by growth in sectors such as M365 Commercial, Azure, and local server businesses, with all business divisions meeting or surpassing the upper range of guidance.
Azure's revenue grew by 34% at constant currency, slightly above the guidance of 33%. The company provided growth guidance for Azure in the second fiscal quarter of between 31% and 32%, which is just below analysts' expectations of 32%. Microsoft reiterated its forecast of accelerated growth for Azure in the second half of fiscal year 2025.
The price target for Microsoft has been adjusted from $470 to $465, maintaining a rating of "Overweight".