Microsoft Azure looks strong going into Q4, Wedbush says
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Microsoft (NASDAQ:MSFT) is set to report fiscal fourth-quarter results on July 26 and going into the release, Wedbush Securities said checks into its Azure cloud computing unit appear to be "strong."
Analyst Dan Ives, who has an outperform rating and a $340 price target on Microsoft (MSFT) shares, said that Wall Street is likely to have a "laser focus" on this piece of the tech giant's business, along with its guidance. 
"On the Azure front, cloud migration and increased focus on digital transformation is not slowing down based on our recent checks with [Microsoft] a core beneficiary of this major enterprise [Chief Information Officer] driven trend," Ives wrote in a note to clients.
Channel checks suggest Azure is growing 46% year-over-year on a constant currency basis and roughly 43% year-over-year, when factoring in foreign exchange headwinds, the analyst said.
Ives added that roughly 44% of workloads are on the cloud and it's expected to reach 70% y 2025, suggesting that there is still major runway for growth in the space, particularly for Microsoft (MSFT). 
"Our unwavering view is that despite the fear in the air given the Fed tightening backdrop and valuations falling off a cliff in tech, underlying digital transformation growth is accelerating and not decelerating into 2023 as part of this 4th Industrial Revolution," Ives explained.
The analyst expects that growth should stay above the 40% threshold into 2023 and with anywhere between 85% and 90% of cloud projects already green-lighted for Microsoft (MSFT), investors can have a "high level" of visibility and confidence around cloud growth, even if there are worries about the broader economy.
On Wednesday, it was reported that Microsoft (MSFT) had cut a number of open job listings in its Azure cloud unit and in security software in response to the economic slowdown.