Analysts peg Microsoft's secretive Azure quarterly cloud revenue figure at $6.3 billion, as Wedbush values Microsoft's overall cloud business at $1 trillion

  • Wedbush Securities analyst Dan Ives values Microsoft's overall cloud business, meaning its Azure cloud platform and cloud software like Office 365, at $1 trillion, and says it could reach $100 billion in annual revenue by its next fiscal year.
  • Meanwhile, analysts at Mizuho Securities and Piper Sandler estimate that Azure itself accounts for 17% of Microsoft's overall revenue. Microsoft reported $37.2 billion in Q1 revenue this week, so that would be $6.3 billion in Azure revenue.
  • Microsoft does not disclose specific revenue figures for the Azure cloud, and only shares percentage growth from the same period of the previous year. That means investors have to rely on these sorts of estimates to have a sense of the health of the business.
  • Microsoft has yet to respond to Business Insider's request for comment.
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Microsoft's overall cloud business is estimated by one prominent analyst to be worth $1 trillion.

Wedbush Securities analyst Dan Ives in a note to investors following Microsoft's latest quarterly earnings report said he believes the company's cloud business accounts for $1 trillion of its current market cap of over $1.5 trillion.

Wedbush arrived at the valuation, Ives told Business Insider, based on the firm's estimates that Microsoft's cloud business will reach $100 billion in annual revenue by its next fiscal year. Microsoft's cloud business, under Ives' definition, includes not only the Azure infrastructure platform, but also cloud-based software like Office 365.

Microsoft calls this "commercial cloud" and on Tuesday said the business reached $15.2 billion in sales for its fiscal first quarter, up 31% compared with the same quarter last year. The company this summer said it surpassed $50 billion in annual commercial cloud revenue.

Meanwhile, revenue for Azure – Microsoft's actual cloud platform – is still the source of speculation. Microsoft doesn't break out revenue figures for Azure, and only shares the percentage by which it grew from the same period of the year before. In its first quarter, that figure was 48%.

Mizuho Securities in a Wednesday note to investors estimated Azure revenue makes up 17% of the company's total revenue, which it said is up from 13% a year ago. Piper Sandler analyst Brent Bracelin also said during the company's earnings call on Tuesday he estimates Azure has grown to 17% of revenue, which he said was up from 4% three years ago.

Microsoft reported $37.2 billion in Q1 revenue this week, so that would put Azure revenue around $6.3 billion. Leading rival Amazon Web Services, the largest player in the cloud market, posted revenue of $10.8 billion in its most recent quarter. Microsoft has yet to respond to a request for comment about the estimates.

Bracelin, the Piper Sandler analyst, also estimated Azure has become a bigger business for Microsoft than Windows.

Got a tip? Contact reporter Ashley Stewart via encrypted messaging app Signal (+1-425-344-8242) or email ([email protected]).

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