Microsoft (MSFT  ) reported Q4 earnings that topped on nearly every key metric. Further, the company's guidance for cloud spending surpassed all expectations. This sent shares of many software and cloud stocks higher as well as it foreshadows that tech, IT, enterprise, and cloud spending remain strong in an environment where many of these companies stock prices have been plunging. Another contributing factor was management's positive commentary on social media.

Many traders on social media were half-joking that Microsoft's (MSFT  ) results "saved" the market. This is because the S&P 500 (SPY  ) was more than 1% lower in after-hours trading prior to Microsoft's results. By today's open, the S&P 500 was nearly 2% higher as the results lifted tech stocks across the board as Microsoft opened 7% higher. However, both pared gains by day's end with Microsoft closing 3% higher and the S&P 500 closing in the red as the Federal Reserve came out more hawkish than expected.

Inside the Numbers

In its fiscal Q2, Microsoft reported $2.48 per share in earnings, a 21% increase from last year and topping expectations of$2.31 per share. Revenue was 20% higher to $51.7 billion, above expectations of $50.9 billion.

The company also said that demand remains strong across all its businesses. Next quarter, the company expects between $48.5 billion and 49.3 billion in revenue, slightly above expectations. It also sees operating margins rising.

Intelligent Cloud segment, which includes the Azure public cloud, GitHub and server products such as Windows Server, generated $18.33 billion, 25.5% growth, and above the $18.3 billion consensus among analysts.

Revenue from Azure and other cloud services increased 46%, in-line with expectations of 46%. More Personal Computing segment, which includes Windows, advertising, devices, and gaming, came in at $17.5 billion, a 15.5% increase and above expectations.

Gaming now accounts for 11% of revenue and should grow with the purchase of Activision Blizzard for $68.7 billion which is the company's largest purchase in its history. It also has provided support for some tech stocks as the massive cash holdings of these companies could be deployed into stocks that are down substantially from their highs.

The Productivity and Business Processes which includes Office, Dynamics and LinkedIn posted $15.94 billion in revenue, a 19% increase and slightly above expectations. Microsoft Teams now has 270 million users.

The company generated $15 billion in security revenue in 2021, up nearly 45% from the prior year. In 2020, security revenue increased more than 40%.

After today's gain, Microsoft is off 15% from it's all-time highs. It's slightly more expensive than the S&P 500 with a forward P/E of 28 vs 20. However, it continues to grow at a very impressive rate, and its business shows no slowdown despite the various changes in the economy.