Microsoft topped sales and profit estimates with fiscal year Q1 results released after the bell in the US on Tuesday.

Revenue of $56.52 billion rose nearly 13% YoY, and easily exceeded the $54.5 billion consensus expected.

It was the briskest pace of top-line growth in six quarters for Microsoft.

Amy Hood lauded “consistent execution” by the company’s sales teams who, together with “partners,” delivered a “strong start to the fiscal year.”

Pretty much everything was a beat, but as I always caution with Microsoft results, it ultimately hangs on the Azure guide. And it’s not always safe to extrapolate after hours price action, even once that figure is known.

Cloud revenue of $31.8 billion was a beat. Analysts were looking for $31.2 billion there. Azure revenue growth was 29% (slightly lower on a constant currency basis). That was well ahead of the midpoint from last quarter’s guide as initially communicated.

The re-acceleration from the prior quarter’s YoY growth rate marked the first pick up since the March quarter in 2022. On the call, Microsoft said Azure growth should be between 26% and 27% this quarter (purple dot in the chart above).

Personal computing sales of $13.67 billion easily exceeded estimates. EPS of $2.99 was a solid beat too ($2.65).

Satya Nadella had to say something about the robots. It’s all about the robots in 2023, and particularly at Microsoft which hit the lottery with OpenAI. “We are rapidly infusing A.I. across every layer of the tech stack and for every role and business process,” Nadella declared.

I don’t know whether to be excited or terrified.

Alphabet’s results were fine too, although the market was irritable about a slight miss for Cloud. Overall revenue of $76.69 billion beat and EPS of $1.55 was a dime ahead of consensus. Operating income missed.

Note that revenue growth is back in the double-digits now. The ex-TAC print was $64.05 billion, a billion ahead of consensus.

Ruth Porat, who now occupies two C-suite roles and one C-suite-equivalent role simultaneously, bragged about the “fundamental strength” of the business, which was on display “again” last quarter. $77 billion in revenue is a lot, she emphasized. Cloud has “momentum.”

Perhaps not enough momentum, though. Cloud revenue was short of estimates at $8.41 billion. The Street wanted $8.6 billion. Cloud is barely more than a rounding error for the top-line, but investors care about it, and they want beats. Never mind that $8.41 billion represented 22% growth versus the same quarter a year ago. Porat later said cloud sales were affected by customer cost-cutting.

Everything else looked ok. Ad revenue was $59.65 billion, better than expected. YouTube ad revenue was a slight beat at $7.95 billion. “Other” beat ($8.34 billion versus $7.94 billion) and “other bets” (which is separate) beat too, with $297 million in sales versus $260 million expected. It must be nice when your side hustles bring in nearly $300 million in three months.

Like Nadella, Sundar Pichai was keen to talk robots. “We’re continuing to focus on making A.I. more helpful for everyone,” he said, before teasing “exciting progress and lots more to come.”

I dare say investors would be better served listening to Hood and Porat at this point. Nadella and Pichai are compelled to pound the table on A.I., even if there’s nothing new to announce right now. Nadella has the edge given Microsoft’s massive stake in OpenAI, but Pichai has… well, he has Google. That’s not nothin’.

Ultimately, Microsoft and Alphabet did fine last quarter. That’s not to pre-judge how the market will trade their reports. Traders’ interpretation of the Azure guide will be pivotal, and investors have been anything but forgiving this quarter. But nothing here suggests the bottom is about to fall out for the broader economy, let alone for America’s mega-caps.