Microsoft Brushes Off Trump Tariff Worries, Says Its Software 'Can Be Super Helpful' To 'Do More With Less'

Microsoft Corp. (MSFT) shares rallied in Wednesday's after-hours session on the back of a solid quarterly beat and guidance. More importantly, the report and the earnings eased investor concerns about the potential fallouts of President Donald Trump's tariffs.

The term "tariffs" appeared only once on the earnings call when CFO Amy Hood discussed business trends at the Windows OEM and Devices business.

She noted that the segment's revenue rose a better-than-expected 3% year over year (YoY) as "tariff uncertainty through the quarter resulted in inventory levels that remained elevated."

When CEO Satya Nadella was asked about the impact of a potential recession on its businesses, the company offered its take on the macro challenges.

Replying to a question from Bernstein analyst Mark Moerdler, Nadella said, "The way, at least, I think we will approach it is, quite frankly, be very focused on how we help our customers if there is any turbulence in the macro."

With Cloud efficiencies and the company's differentiated layers of stack, from software-as-a-service (SaaS) application to infrastructure, its software can help fight inflationary or any growth pressure, Nadella said.

"Where you need to do more with less, I think we can be super helpful in that."

While issuing the fourth-quarter guidance, Hood said that through April, demand signals across its commercial businesses, as well as on LinkedIn, Gaming, and Search, remained consistent.

Hood said, "Our outlook assumes those trends continue in Q4," and added that results may be impacted if the environment changes.

The company also expects a weaker dollar to boost reported revenue growth by one point and raise the cost of goods sold and operating expense growth by less than a point.

The greenback has weakened this year amid the tariff turmoil.

Microsoft stock added 6.93% in Wednesday's after-hours session after ending 0.31% higher at $395.26. 

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