Microsoft (MSFT)-Boeing's Partnership to Boost Aviation Analytics

Microsoft MSFT and Boeing BA recently announced that they will expand their strategic partnership to accelerate Boeing’s digital transformation.

Per the expanded collaboration, Boeing will leverage Microsoft Cloud and its AI capabilities to update its technology infrastructure.

The extended partnership will also provide Boeing mission-critical applications with intelligent new solutions that are data driven, further opening new ways of working, operating and doing business.

Microsoft and Boeing have been working together for more than 20 years. The partnership is built on Microsoft’s history to support Boeing’s digital future by helping it optimize operations and develop digital solutions that benefit the aviation industry.

Microsoft Azure’s Robust Demand to Drive Top Line

Microsoft has doubled down on the cloud computing opportunity. In the cloud computing era, information and applications are being stored, managed and protected in the cloud, from where only necessary amounts are accessed by devices of varying shapes, sizes, weights functions and portability. More software providers are offering their tools as-a-service based on subscriptions for specified periods.

Microsoft’s performance is benefiting from strength in the Azure cloud platform amid the accelerated global digital transformation. Azure’s increased availability in more than 60 announced regions globally is expected to have strengthened Microsoft’s competitive position in the cloud computing market, dominated by Amazon Web Services.

In the last reported quarter, the company reported revenues of $45.3 billion, up 20.1% year over year driven by the robust adoption of Azure cloud offerings and continued momentum in usage of the Teams app, advanced security and identity offerings.

Microsoft cloud revenues amounted to $22 billion, up 32% year over year, in the second-quarter fiscal 2022.

Last month, Microsoft announced a five-year strategic alliance with Rogers Communications RCI to help enterprise and small- and medium-business customers accelerate their digitization process.

Per the agreement, Rogers along with its own reliable 5G network, will leverage Microsoft Azure’s public cloud capabilities to power innovation, providing customers with new experiences and enabling employees to collaborate with more agility across the organization.

Microsoft Corporation Price and Consensus

Microsoft Corporation price-consensus-chart | Microsoft Corporation Quote

Microsoft has also been keen on expanding its healthcare cloud solutions portfolio. Recently, the company announced certain advancements in cloud technologies for healthcare and life sciences with the general availability of Azure Health Data Services and updates to Microsoft Cloud for Healthcare.

The company also announced the acquisition of Nuance Communications. Headquartered in Burlington, MA, Nuance Communication specializes in offering innovative conversational Artificial Intelligence (AI) tools to boost business productivity.

The acquisition is expected to increase Microsoft’s total addressable market or TAM in the healthcare vertical to $500 billion, noted the software giant.  Microsoft further added that Nuance solutions are leveraged by nearly 77% of hospitals as well as used by more than 55% of physicians and 75% of radiologists in the United States.

In the December quarter of last year, the Intelligent Cloud segment, including server and enterprise products and services, contributed 35.4% to total revenues. The segment reported revenues of $18.327 billion, up 25.5% (same percentage at cc) year over year.

Server product and cloud services revenues rallied 29% year over year (same percentage at cc). The high point was Azure and other cloud services’ revenues, surging 46% year over year (same rate at cc). The upside was driven by robust growth in consumption-based business.

In the ongoing quarter, the company expects Intelligent Cloud revenues to be between $18.75 billion and $19 billion. Azure's revenue growth is likely to reflect continued strength in consumption-based services.

Zacks Rank and Stock to Consider

Microsoft currently holds a Zacks Rank #4 (Sell).

Microsoft’s shares are down 10.8% in the year-to-date period compared with the Zacks Computer - Software industry’s plunge of 10.8% and the Computer and Technology sector’s fall of 11.1%.

A better-ranked stock in the Zacks Computer and Technology sector is Axcelis Technologies ACLS, sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ACLS shares are down 17.1% in the year-to-date period compared with the Zacks Electronics - Manufacturing Machinery industry’s plunge of 18.2% and the Computer and Technology sector’s fall of 11.1%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.