Finance

US tech giant edges towards trillion-dollar valuation as profits soar

US technology behemoth Microsoft is edging nearer a trillion-dollar valuation after its profits soared in the first-quarter of 2019. Microsoft enjoyed the increase in its revenues largely because of its cloud and business services continue to resonate with the market.

Profits’ in the opening quarter climbed by 19% to $8.8bn and that represents an increase of 14% from the same period a year earlier. Microsoft also saw its shares gain 3% on the New York Stock Exchange which pushes it closer to a $1 trillion valuation.

By the close of the bell on Wall Street, Microsoft was valued at $960m, which places them just behind Apple and slightly ahead of Amazon.

The financial results indicate that Microsoft is now becoming increasingly reliant on cloud computing and other business services which now drive its earnings, in contrast to its earlier days when it focused on consumer PC software.

“Leading organizations of every size in every industry trust the Microsoft cloud," chief executive Satya Nadella said in a statement.

Commercial cloud revenue rose 41 percent from a year ago to $9.6 billion, which now makes up nearly a third of sales, Microsoft said.

In addition to this, it was disclosed that some $10.2 billion in revenue came from the productivity and business services unit which includes its Office software suite for both consumers and enterprises, and the LinkedIn professional social network.

The more personal computing unit which includes its Windows software, Surface devices and gaming operations generated $10.6 billion in the quarter.