Investing.com --Shares in Microsoft Corporation (NASDAQ:MSFT) rose in premarket U.S. trading on Wednesday after the tech giant reported earnings that hinted at resilience in its core cloud business.
Microsoft's key intelligent cloud division posted $22.1 billion in revenue in the first quarter of 2023, an uptick of 16% compared to the same period last year. The top-line result at the unit, which includes the firm's crucial Azure public cloud computing platform, beat Bloomberg consensus estimates of $21.89B.
On a group-wide basis, Redmond, Washington-based Microsoft posted earnings per share of $2.45 on sales of $52.86B, both of which were above expectations. Shares in Microsoft surged by more than 7%.
“We were encouraged by Microsoft’s leading indicators that are critical in measuring the overall health of the company,” analysts at Goldman Sachs said.
Elsewhere, quarterly search advertising revenue at Google-parent Alphabet (NASDAQ:GOOGL) slipped slightly to $54.55 billion, although the drop was less than analysts had feared. The company also delivered higher-than-anticipated revenue and net profit during the first three months of the year. Shares moved lower, paring back earlier gains.
The returns from Microsoft and Alphabet fuelled hopes that demand for digital services - a booming industry during the pandemic - is holding up in the face of a potential economic downturn.