After Microsoft closed out its second fiscal quarter of 2022 as the company's most successful one since the start of the pandemic, the tech giant managed to surpass previous revenue guidance again between January and March of 2022, largely owed to an increase in demand for server products and connected cloud services. Overall, the tech giant generated $49.3 billion in revenue and a net income of $16.7 billion over the past three months. This can in no small part be attributed to the continued demand for corporate IT and traditional software offerings, as our chart shows.
Continuing an ongoing trend, the Server and Office segments made up roughly 57 percent of the tech giant's Q3 2022 revenue, four percent more than in the previous quarter. Year over year, Azure and other cloud solutions stood out as the fastest-growing subsegment with a revenue increase of 46 percent. Microsoft's gaming branch, which saw record numbers between October 2021 and January 2022 likely due to the continued growth of Xbox Game Pass and the release of the highly anticipated new Halo game, only grew by four percent compared to Q3 2021. If the much-discussed acquisition of Activision Blizzard King is successful, however, this segment could potentially outperform Windows products and become the third-biggest revenue pillar for the company.
Even though Microsoft's financial results offer no cause for concern for investors, other Big Tech corporations like Alphabet fared worse between January and March 2022. Fittingly, the Nasdaq lost around four percent on Tuesday, hitting its lowest point since December 2020 according to reporting by Reuters in part due to the underperformance of growth companies. Talking to Reuters, portfolio manager at Kingsview Investment Management in Chicago Paul Nolte said: "Expectations for growth (companies) are very, very high, and you don’t meet expectations and you are going to see the Netflix or the Google drops. It's not industry specific, it’s more company specific."
