WASHINGTON, Oct 25 ― Tech giant Microsoft said yesterday its profits rose in the latest quarter, boosted by its strength in the closely watched cloud services segment.

The company exceeded expectations to report a net income of US$22.3 billion (RM106.7 billion) for the July to September period, up 27 per cent from a year ago.

All eyes have been on Microsoft's artificial intelligence and cloud computing performance, and a key aspect is the Azure cloud service, which competes with Amazon's AWS and Google Cloud.

In the latest quarter, revenue growth for Azure and other cloud services came in at 29 per cent from a year ago, a slightly faster pace than the three months prior.

Overall, the company reported US$56.5 billion in sales for the quarter, also higher than anticipated.

Microsoft shares surged by 4.6 per cent in after-hours trading.

"We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers,” Microsoft chief executive Satya Nadella said in a statement.

The latest earnings report comes shortly after Microsoft closed its blockbuster acquisition of Activision Blizzard, whose video games include "Call of Duty,” sealing one of the biggest technology tie-ups in history. ― AFP