Microsoft Azure checks were 'stable,' growth going into 2023 'better than feared'
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In a Tuesday research note, investment firm Wedbush Securities said its checks into Microsoft's (NASDAQ:MSFT) cloud computing unit were "stable" and that growth going into the new year was "better than feared."
Analyst Dan Ives, who has an outperform rating on Microsoft (MSFT), noted that growth for Azure, Microsoft's (MSFT) cloud unit, was more stable than some negative naysayers have said, citing recent conversations with customers and partners. 
"While Azure growth has clearly decelerated in the field we believe MSFT should be able to exceed its 37% Azure growth target (constant currency) in the December quarter when Redmond reports earnings in late January," Ives wrote in a note to clients.
Ives added that 90% or more of Azure and Office 365 large deal activity is "still on track" after speaking to Microsoft (MSFT) partners and any slowdown or push-out is likely to be "modest" in scope. 
There could be some puts and takes, as deals in the financial space may start to be downsized with data center projects being slowed or pushed out, but federal deals are seeing the opposite. Microsoft (MSFT), Amazon (AMZN), Google (GOOG) (GOOGL), Oracle (ORCL) and IBM (IBM) are still seeing a "surge" of deal activity from Washington going into 2023, Ives added, including the recent $9B cloud deal from the Pentagon.
"While [it's] easy right now to yell fire in a crowded theater on [Microsoft's] stock with the tech sector being enemy #1 on the Street, we believe this is not the time to shift away from Redmond which is still in the middle innings of its cloud transformation with Azure and Office 365 leading the way," Ives explained. 
Last week, Wells Fargo said Microsoft (MSFT) was one of the firm's top enterprise software stocks for 2023.