The Microsoft Corp (NASDAQ: MSFT) share price soared 7% in after-hours trading overnight as investors reacted to the US tech giant's FY25 third quarter update.
As one of the biggest constituents in the US and global share market indices, Microsoft has a sizeable influence on the stock market. It also gives a great insight into the US and global economy.
Microsoft has been heavily investing in AI for both its clients and initiatives to integrate AI into its own business.
Let's have a look at what Microsoft reported.
Image source: Microsoft
FY25 third quarter update
Microsoft revealed that in the three months to 31 March 2025, revenue increased 13% to $70.1 billion (with 15% growth in constant currency terms).
In terms of profit generation, operating profit grew by 16% to $32 billion (up 19% in constant currency), net profit rose 18% to $25.8 billion (up 19% in constant currency) and earnings per share (EPS) grew 18% to $3.46 (up 19% in constant currency).
Microsoft sent $9.7 billion to shareholders during the quarter, through a mixture of dividends and a share buyback.
Looking at some of the business areas, Microsoft 365 commercial products and cloud services revenue increased 11%, Microsoft consumer products and cloud services revenue rose 10%, LinkedIn revenue increased 7%, intelligent cloud (including Azure) revenue rose 21% and Xbox content and services revenue rose 8%.
Management commentary
The Microsoft chair and CEO Satya Nadella said:
Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth. From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers.
Amy Hood, executive vice president and chief financial officer of Microsoft, said:
We delivered a strong quarter with Microsoft Cloud revenue of $42.4 billion, up 20% (up 22% in constant currency) year-over-year driven by continued demand for our differentiated offerings.
How can Aussies buy Microsoft shares?
The business doesn't directly trade on the ASX, but there are a few ways for Australians to gain exposure.
Firstly, Aussies can buy Microsoft shares on the NASDAQ using their share broker.
There are also a number of exchange-traded funds (ETFs) on the ASX that Aussies can buy which provide that exposure.
The two I'd be most drawn to gain exposure to Microsoft are the Betashares Nasdaq 100 ETF (ASX: NDQ) and Global X Fang+ ETF (ASX: FANG).
The NDQ ETF – which is up more than 2% today – invests in 100 of the largest businesses on the NASDAQ. It currently has an 8.1% weighting to Microsoft shares.
The FANG ETF owns 10 of the biggest tech companies in the US and regularly ensures the positions are equally weighted. That means the Microsoft allocation should be around 10%.
