Microsoft Q1: A Rare Buying Opportunity Emerges

While Microsoft's FY1Q25 revenue beat may sound positive, most of that beat came from the More Personal Computing segment, with Azure only coming in in-line with expectations.
Azure's 34% growth in FY1Q25 is in-line with expectations, but management guided to Azure growth of 31% to 32% next quarter, missing expectations by 1 percentage point.
The key reason for the miss was due to third-party infrastructure providers that are delaying the bringing online of data center capacity.
In turn, because the AI services portion of Azure is largely supply constrained, I expect that in the second half of FY2025, with easing of supply constraints, Microsoft should see an reacceleration in growth due to Azure.

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Microsoft (NASDAQ:MSFT) posted a rare disappointing quarter, which resulted in share price weakness post earnings.

While revenue in the current FY1Q25 quarter was above guidance, most of the beat came from the less strategic More Personal Computing segment, while

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Azure's 34% growth in FY1Q25 is in-line with expectations, but management guided to Azure growth of 31% to 32% next quarter, missing expectations by 1 percentage point. The key reason for the miss was due to third-party infrastructure providers that are delaying the bringing online of data center capacity. In turn, because the AI services portion of Azure is largely supply constrained, I expect that in the second half of FY2025, with easing of supply constraints, Microsoft should see an reacceleration in growth due to Azure. Morsa Images Microsoft (NASDAQ:MSFT) posted a rare disappointing quarter, which resulted in share price weakness post earnings. 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