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Microsoft

Microsoft shares surge past 1999 high

Marco della Cava
USA TODAY

SAN FRANCISCO — Microsoft shares surged 5% in early trading Friday,and passed a high set in 1999, helped by enthusiasm for progress in its cloud business.

Microsoft CEO Satya Nadella said, "As an immigrant and as a CEO, I’ve both experienced and seen the positive impact that immigration has on our company."

The stock closed up 4% at $59.96,breezing past the $58.72 mark set in December 1999.

Friday's rally follows Microsoft's latest quarterly report, out late Thursday, that beat analyst expectations for adjusted sales and profit and showcased a doubling of growth in its Azure cloud business, while reflecting continued strain from consumers' pivot away from PCs and traditional software purchases.

"The biggest takeaway from this quarter's results will be the re-acceleration of Microsoft's cloud business, which now is on pace for more than $13 billion annualized revenue," says Josh Olson of Edward Jones Research. "Microsoft now is approaching equal-footing with AWS cloud platform in terms of aggregate cloud revenue, and is steadily transforming its business to the next era of computing."

Speaking on CNBC's Squawk Box on Friday morning, former Microsoft CEO Steve Ballmer praised his successor Satya Nadella for building out the company's cloud business.

Microsoft reported first-quarter 2017 adjusted earnings of 76 cents a share on adjusted revenue of $22.3 billion Thursday. That easily topped the 68 cents and $21.7 billion analysts predicted, according to S&P Global Intelligence.

First-quarter reported revenue was nearly flat at $20.45 billion compared to $20.38 billion in the year ago quarter, while net income fell 4% to $4.69 billion.

Personal computing revenues declined 2% to $9.3 billion, which included a 72% drop for Microsoft's ill-fated phones business and a 5% drop in gaming. Windows OEM and commercial products revenue both remained flat.

Helping boost the quarter were gains in productivity and business processes, up 6% to $6.7 billion, and intelligent cloud, up 8% to $6.4 billion.

That cloud jump includes a 116% improvement for Microsoft Azure, which has roughly 10% of the global cloud market compared to industry leader Amazon Web Services at 30%. Microsoft CEO Satya Nadella has predicted that the company would hit $20 billion in annual cloud revenue by 2020.

Contributing: Edward C. Baig

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