Microsoft Exceeds Expectations with Strong Earnings Report

Morningstar analysts have released their take on Microsoft's fiscal fourth-quarter earnings report. The company exceeded expectations, reporting revenue growth of 17% year-over-year in constant currency to $90.0 billion.

Operating margin was 45.1%, beating the high end of guidance implied at 44.7%. Azure growth reached 43% in constant currency for the quarter, surpassing guidance of 39.5%. Capital expenditure grew 110%

Morningstar maintains its fair value estimate for Microsoft stock at $600 per share and a wide economic moat rating. The company's financial strength is attributed to its strong balance sheet and growing revenue.

However, there are concerns about the public cloud buildout remaining in its early phases and Microsoft facing intense competition from Amazon Web Services (AWS).