Outages Cause Concern
Microsoft users continue to experience issues accessing the company’s cloud network. This is now the second week of disruption to parts of the Microsoft cloud network.
Last week, a significant Azure Active Directory authentication issue impacted users on a global scale. Later in the week, European and Indian customers were affected by an exchange/outlook issue. This has continued with a number of different regions noting a lack of access to exchange, outlook, teams, and share-point.
Indeed, Microsoft issued a warning this week to its Office 365/Microsoft 365 customers, notifying them that they might experience residual issues. Among these issues, Microsoft highlighted access to the admin center as well as syncing between Outlook mobile and desktop as key flashpoint areas.
Solid Q2 Earnings Beat
Microsoft shares have been broadly higher this year. They have recovered from the lows seen during the pandemic around 132 to trade highs of 232. However, as of writing, shares are around 11% off the year’s peak.
The company posted a solid set of second-quarter earnings, with earnings per share of $1.46 vs $1.34 expected. In its Q2 earnings call, Microsoft reported revenues of $36.9 billion. This comfortably beat Wall Street estimates for a $35.7 billion result. The tech firm also noted that it had returned $8.5 billion to shareholders in repurchases and dividends across Q2.
Commenting on the results, Microsoft CEO Satya Nadella said:
“We are innovating across every layer of our differentiated technology stack and leading in key secular areas that are critical to our customers’ success. Along with our expanding opportunity, we are working to ensure the technology we build is inclusive, trusted, and creates a more sustainable world, so every person and every organization can benefit.”
Azure Biggest Growth Driver in Q2
The biggest drivers of growth over the quarter were the huge revenue increases seen in the group’s cloud computing business. Azure recorded a 62% jump in growth on the same quarter last year. Given that growth in Azure had been falling over the last four consecutive quarters, this was an important result. Furthermore, this makes resolving the current outage for Azure users an even more pressing issue. This is given its importance within Microsoft’s revenues landscape.
Potential Head & Shoulders Forming
Shares in Microsoft, while down off the year’s highs, having broken through the rising trend line from year to date lows, have found support at a retest of the 199.60. Bulls need to see price quickly cross back above 216.79 to negate the potential head and shoulders pattern which is forming.
A break of the pattern neckline at 199.60 would see the 190.69 level as the first target.