Microsoft stock rallies after fiscal third-quarter results exceed expectations and upbeat forecast bucks economic gloom

• Microsoft stock rose 4.5% Wednesday after reporting strong fiscal third-quarter earnings late Tuesday.
• EPS rose 9% to $2.22, beating expectations of $2.19. Revenue grew 18% to $49.36 billion, above estimates for $49.05 billion.

Microsoft stock rallied early Wednesday on the heels of its strong fiscal third-quarter earnings and upbeat tech-spending outlook.

Earnings per share rose 9% to $2.22, beating Wall Street expectations of $2.19. Revenue grew 18% to $49.36 billion, above estimates for $49.05 billion.

The tech giant's Intelligent Cloud sector posted $19 billion in revenue, up 26%. The personal computing division's revenue jumped 11% to $14.53 billion. The company acquired Activision Blizzard in January, growing its video game segment to house the publisher of titles like "Call of Duty" and "Candy Crush."

Microsoft stock rose 4.5% to $282.33 Wednesday. But shares were down 19% so far this year at Tuesday's close.

CFO Amy Hood also said on Microsoft's earnings call that she expects fiscal fourth-quarter revenue of $52.4 billion-$53.2 billion. While the midpoint of the guidance is in line with analysts' views for $52.8 billion, it comes despite worsening gloom about the macro-economic environment as inflation stays high while COVID-19 infections and Russia's war on Ukraine worsen supply-chain woes.

CEO Satya Nadella predicted tech spending would stay strong even if the economy slows, as software that boosts productivity would remain in demand as a way to offset high inflation.