April 25 (Reuters) - Microsoft Corp (MSFT.O) surpassed Wall Street's projections for quarterly revenue and earnings on Tuesday, powered by growth in its cloud computing and Office productivity software divisions, and the firm said artificial intelligence technologies were encouraging sales.
The business anticipated sales in its key segments for the current quarter would meet or beat Wall Street estimates.
Shares surged 8.3% in after-market trading on a report by Redmond, Washington-based Microsoft that earnings were $2.45 per share in the fiscal third quarter, topping Wall Street forecasts of $2.23, according to data from Refinitiv.
"The bottom line is that despite all the concerns that the sky is falling in big tech, the truth is companies still see value in cloud computing and there's still a huge percentage of workloads that can be moved to the cloud," said Bob O’Donnell, an analyst with TECHnalysis Research.
Microsoft said growth at its cloud company Azure was 27% in the current reported quarter, topping analyst estimates for 26.6% growth, according to the average from 23 analysts surveyed by Visible Alpha.
Alphabet Inc (GOOGL.O) which also has a major cloud business, announced solid earnings Tuesday, raising its stock 2.4% after the bell. Those results and Microsoft's helped raise shares of Amazon.com Inc (AMZN.O), another big cloud provider, 4.8% in after hours trade.
Microsoft sales grew 7% to $52.9 billion in the quarter ended March, inching over analyst projections of $51.02 billion, according to Refinitiv.
The majority of Microsoft revenues still come from selling software and cloud computing services to consumers. But the business has garnered headlines this year with its cooperation with ChatGPT maker OpenAI and sprucing up the Bing search engine with artificial intelligence capabilities.
Chief Executive Satya Nadella told investors on a conference call the business had more than 2,500 Azure-OpenAI service clients and that AI was incorporated into a broad variety of goods.
Bing, long an also-ran to search engine Google, has 100 million daily users and has seen downloads climb with the inclusion of AI capabilities, Nadella added.
Analysts had anticipated a dismal economic outlook to damage Microsoft's Windows division, which relies significantly on PC sales that have fallen in recent quarters. The sales dip in the area was less severe than experts predicted, with Microsoft reporting revenue of $13.3 billion vs analyst projections of $12.19 billion, according to Refinitiv data.
The company's productivity sector, which includes its Office software and advertising revenues for the LinkedIn social networking site, also topped analyst forecasts with revenue of $17.5 billion vs predictions of $16.99 billion, according to Refinitiv.