Microsoft Corp reported a better-than-expected quarterly profit on Thursday as demand for its cloud computing services for companies rose and personal computer software business stabilized.

Shares of the technology giant were up 1.76 per cent at US$80.15 in trading after the bell.

Microsoft's (MSFT.O) focus on fast-growing cloud applications and platforms is helping it beat slowing demand for personal computers that has hurt sales of Windows - the software that powered the company to the top during the dotcom boom. Under Chief Executive Satya Nadella, Microsoft's cloud business - which includes products such as Office 365, Dynamic 365 and the flagship Azure computing platform - has emerged as a major growth driver. Revenue from Microsoft's intelligent cloud business rose nearly 14 per cent to US$6.92 billion in the first quarter ended Sept. 30. Analysts on average had expected US$6.70 billion, according to financial data and analytics firm FactSet.

Revenue from Azure, which competes with Amazon.com Inc's Amazon Web Services and offerings from Alphabet Inc's Google, IBM and Oracle Corp, grew 90 per cent compared to a 97 per cent growth rate in the preceding quarter.

Microsoft said commercial cloud annualized revenue run rate reached US$20.4 billion in the quarter.

Revenue from Microsoft's personal computing division, its largest by revenue, fell 0.2 per cent to US$9.38 billion but handily beat analysts' estimate of US$8.81 billion.

The unit includes Windows software, Xbox gaming consoles, online search advertising and Surface personal computers.

The technology giant's net income rose to US$6.58 billion, or 84 cents per share, in the first quarter ended Sept. 30, from US$5.67 billion, or 72 cents per share, a year earlier

Revenue rose 12 per cent to US$24.54 billion. Microsoft's shares had risen nearly 27 per cent this year through Thursday, eclipsing the 14.4 per cent gain in the broader S&P 500.