Focus on Enterprise Pays off For Microsoft
January 30, 2020
Beth Kindig
Lead Tech Analyst
Microsoft is unique from its peers as its cloud services were designed to serve the needs of large companies. This is particularly true with regards to Microsoft’s lead in hybrid cloud, which is attractive to many companies who are adopting cloud infrastructure for the first time, and who desire more flexibility than traditional cloud-only services can offer.
The company’s fiscal Q2 2020 earnings report today prove that Microsoft’s slow and steady focus on the enterprise customers is paying off. Operating income and net income were especially healthy, rising 35% and 38% on a GAAP basis, respectively, from a year earlier. Profits came in at $11.6 billion, and earnings-per-share of $1.51 were up 40%. Analysts polled by FactSet were expecting $1.32 per share on average.
The company is guiding for revenue of $34.1 billion to $34.9 billion in the fiscal third quarter, in-line with analyst estimates of $34.16 billion.
Looking beyond growth, this was also a banner quarter for Microsoft, who secured the Department of Defense’s $10 billion JEDI cloud contract. This contract will cover 1,700 data centers and move 3.4 million end users and 4 million endpoint devices off private servers and onto the cloud. Amazon is contesting the decision.
Read the full article published on MarketWatch here.
More To Explore
Newsletter
Nvidia, CXL, and the Battle to Improve AI Inference Economics
This is Part 2 of our two-part series on AI inference economics. In Part 1 — Why Nvidia's Next AI Battle Is About Tokens per Watt, we laid out why tokens per watt has become the defining metric for in
Why Nvidia’s Next AI Battle Is About Tokens per Watt
As hyperscalers move from building AI infrastructure to monetizing it, tokens per watt helps to reflect if revenue is scaling and if profitability is improving. Offload engines can increase tokens per
Micron Is Up 900%. Here’s Why the AI Memory Trade May Still Have Room to Run
Over the past 10 months, memory chip stocks have gone from being solid beneficiaries of the AI boom to capturing a massively outsized piece of the return pie. The inflection in Micron’s performance de
Why the S&P 500 Shrugged Off the Iran War — and What Could Finally Break the Rally
On February 28th, the U.S. went to war with Iran, and the market was handed the kind of shock it hasn't contended with for years. The conflict set off a chain reaction across the region: an ongoing su
Nvidia, CoreWeave, and Nebius: Inside the Circular Financing of the GPU Boom
Neoclouds are one of the more hotly debated AI business models, with CoreWeave and Nebius being the two most widely recognized names. These companies have seen their sales, backlog, and share prices s
AMD, Nvidia, Arm, Intel: Inside the $120 Billion CPU Gold Rush
CPUs have gone from an afterthought to becoming the AI trade’s next great bottleneck – and with AMD, Nvidia, Arm and Intel circling a market that is doubling nearly overnight, the only question left i
Google TPU v8 vs Nvidia: How Inference Is Rewriting the AI Market
In April, Google announced it would begin selling its TPUs to select third-party data center operators, which is something the market has anticipated for nearly a decade. The TPU-versus-Nvidia-GPU deb
The AI Networking Stock That Beat Nvidia by 7X YTD for Returns of 135% YTD
AI networking stock Lumentum is among the key I/O Fund winners in 2026. We allocated heavily to LITE in January—a month before Nvidia backed the company. While most investors couldn’t stomach taking a
Bloom Energy — Our 2026 Top Pick Was the Best Performing Stock in April
April was the best month in six years for the Nasdaq-100. The single best-performing large-cap stock wasn't Nvidia, Microsoft, or Meta. It was Bloom Energy, up roughly 109% in one month. As you'll rec
Inside Nvidia’s $4B Optical Strategy—and Why CPO Changes Everything
Within the AI investment theme, there is nowhere that the supply chain shifts faster than in networking, leading companies to gain content on new platforms or lose incremental share. The reason is str
