The latest results suggest that Microsoft could continue to gain cloud market share. Microsoft stock has outpaced the major indices as CEO Satya Nadella has focused the company more on cloud services, particularly for business use. Further cloud growth could help bring the stock higher, as analysts expect.
The number of database, storage, compute, analytics, and devops services sitting under the Azure brand umbrella continues to grow and it has become hard to find something that Azure can’t do. In many cases, Azure is running right alongside the other cloud providers and in a few of the corners it’s inching into the lead.
At the core of the business, Azure offers much of the same commodity products as everyone else. If you need a machine running a current version of Linux (yes, Linux!) or Windows, you can spin one up in a few clicks. If you have some data to store, Microsoft will squirrel away the bits just like everyone else.
“Respondents expect today’s top vendors to continue to dominate the rankings in three years. Microsoft remains the clear leader, with 22% of the votes today and in three years respectively,” the analysts wrote.
The analysts repeatedly pointed out that workload usage doesn’t line up exactly with actual revenue. In the third quarter AWS captured $9 billion in revenue. Microsoft doesn’t specify quarterly Azure revenue but analyst Jay Vleeschhouwer of Griffin Securities, who has a buy rating on Microsoft, estimated that Azure revenue in the quarter was about $4.33 billion.
About 91% of analysts surveyed by FactSet have the equivalent of buy ratings on Microsoft stock, including Goldman Sachs.
