Microsoft's Nadella may be upbeat, but investors are wary of software giant's outlook
Justin Sullivan

Microsoft (NASDAQ:MSFT) Chief Executive Satya Nadella touted his company's business performance on Tuesday, saying that the Redmond, Washington-based software giant is still seeing more growth in its Windows and cloud businesses "as we emerge from the pandemic."
Nadella spoke on a conference call to discuss Microsoft's (MSFT) fiscal first-quarter results and outlook, saying, "In a world facing increasing headwinds, digital technology is the ultimate tailwind."
But that wasn't enough to appease investors, who sent Microsoft's (MSFT) shares down more than 6% in after-hours trading following comments about the company's results and outlook from Nadella and Chief Financial Officer Amy Hood.
On the surface, it appeared that Microsoft (MSFT) had plenty of tailwinds behind it. For its fiscal first quarter, the company reported a profit of $2.35 a share on $50.1B in revenue, which exceeded analysts' consensus estimates. Microsoft's (MSFT) results included $20.3B from intelligent cloud services such as Azure, a 20% gain on a year-over-year basis.
However, despite Nadella's optimism, Wall Street was a tad wary about Microsoft's (MSFT) report, as its intelligent cloud sales showed signs of slowing growth. While revenue was up from a year ago, last year's first quarter included year-over-year intelligent cloud revenue growing by 31%.
Hood went on to say that while Microsoft (MSFT) expects its full-year revenue to show "double-digit" growth, its results would be "partially offset" by expected ongoing declines in personal computer sales for both consumers and business customers.
Hood said that company's Windows business would see some impact from a "materially weaker" PC market, but that Microsoft (MSFT) still anticipates "healthy growth" across its Microsoft Cloud service offerings.
Still, Hood didn't give any precise earnings or revenue forecasts for either Microsoft's (MSFT) full fiscal year, or its current second quarter. 
Microsoft (MSFT) was among a slate of bellwether tech companies reporting quarterly results this week in what is seen as a crucial period for the tech sector.