Azure is a cloud computing program created for developing and managing applications, and the product's massive growth has confirmed the era of superclouds, according to Global Equities Research's Trip Chowdhry.
Growth of Azure
According to Chowdhry, Azure's growth has validated the growth of scale-out apps and dwarfing of sale-up apps, "which may have negative growth rates in two to three years."
The analyst warns investors in SAP SE (ADR) SAP, telling them they "should be worried" due to dwarfing scale-up apps.
Growth in scale-out apps and the dwarfing of scale up apps mean companies are more often multiple and weaker computers to perform applications rather than relying on one or a few stronger computers to run programs.
Amazon Vs. Microsoft
"On relative basis - Amazon.com, Inc. AMZN AWS is better positioned than MSFT-Azure, because, for AMZN AWS every customer win is an incremental revenue opportunity; while for MSFT Azure, this is not always the case," said Chowdhry.
Additionally, the Global Equities analyst warned that some of Microsoft's "customer wins are cannibalistic and hence not always incremental."
Despite Microsoft's beat, Chowdhry maintained his six-years-old hold rating on Microsoft.
According to TipRanks, Trip Chowdhry is among the best analysts covering Microsoft with 62 percent accuracy and +15.9 percent average return per recommendation. The analyst is ranked 267 out of 4057 analysts.
At time of writing, Microsoft traded at $56.49, up 6.41 percent on the day.
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