Microsoft Corp reported growth in revenue and profits in the third quarter of fiscal 2022 as demand for its cloud services and software continued to rise as the epidemic triggered a shift in telecommuting, according to results released after trading on Tuesday.

In the quarter to march, Microsoft Corp's revenue rose 18 per cent from a year earlier to $49.4 billion, while net profit rose 8 per cent to $16.7 billion. Analysts had expected revenue of about $49 billion and a net profit of about $16 billion.

During the outbreak, sales of Microsoft Corp and other business software companies soared as organizations around the world used more digital tools to help work remotely. This increases the demand for Microsoft Corp's office applications and cloud infrastructure services.

Microsoft Corp is still the second largest cloud infrastructure provider after Amazon.Com Inc, but the company has been taking advantage of its leading position in office applications to gain market share by taking advantage of Azure cloud to get big deals. It accounted for nearly 20 per cent of the market in 2020, according to Gartner, the research firm.

In terms of Microsoft Corp's sub-business revenue during the reporting period, Microsoft Corp's smart cloud division generated $19.05 billion in revenue, higher than the market had expected, with year-on-year growth of 26%, of which revenue from Azure and other cloud services increased by 46%. In addition, the personal computing business camp, which includes Windows, Xbox, search advertising and Surface, collected $14.5 billion, up 11% from a year earlier.

It had been thought that the growth of Microsoft Corp's cloud service Azure would be not as strong as expected, and there were fears that the growth rate might slow after the last quarter's results were announced in January.Analysts say growth now appears to be back on track, indicating that companies are continuing to invest in cloud services.

Although geography, inflation and other factors have been hurting growth in many industries, Microsoft Corp shows few signs of slowing.The company expects sales of between $52.4 billion and $53.2 billion this quarter, compared with analysts' expectations of about $52.8 billion in the second quarter.

After the announcement of the results, Microsoft Corp reversed the after-hours decline and the increase widened to 4.5 per cent.

Microsoft Corp's chief financial officer, Amy Hood, said geography is expected to have an impact on the company's sales of about $110 million this quarter.

Affected by risk aversion, technology stocks suffered a general sell-off, with Microsoft Corp shares falling nearly 4 per cent overnight and the NASDAQ down 4 per cent. Geopolitical factors superimposed on the progress of the epidemic have heightened investor concerns about the global economy and triggered volatile trading in recent trading days. Inflation is putting pressure on businesses and consumers, and signs that the Fed says it will tighten monetary policy quickly could be a drag on economic growth.

Analysts say that in the latest phase of the epidemic, consumer spending has shifted from technology-centric goods to face-to-face services, undermining investor enthusiasm for the sector. Jason Pride, chief investment officer for private wealth investments at Glenmede, said: "We may now realise that the future potential of technology companies that have experienced a lot of growth may have been overestimated. "

As for other technology stocks, Alphabet Inc-CL C's parent company, Alphabet, reported a slowdown in sales growth in the first quarter and shares fell after the close. Alphabet reported revenue growth in its cloud computing business, which is trying to catch up with Amazon.Com Inc and Microsoft Corp. Cloud business is still an important area of investment for the company, but Alphabet Inc-CL C's cloud service is still not profitable.