Microsoft's earnings show new vigor

Over the years, many have predicted the death of Microsoft (MSFT) -- not literally -- but in relevancy as mobile devices became more important than Microsoft's bastion in desktop computing. But the software giant's latest earnings report shows that it is still forging ahead.

Revenue of $20.4 billion for the quarter that ended March was down less than a half-percent year-over-year from $20.5 billion in 2013, meeting average analyst projections. Net income of $5.7 billion was 68 cents per share, higher than the projected 63 cents.

"This quarter's results demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world," said new CEO Satya Nadella in the press release about the earnings, the first reported under his leadership. "We are making good progress in our consumer services like Bing and Office 365 Home, and our commercial customers continue to embrace our cloud solutions. Both position us well for long-term growth."

Revenue at the device and consumer division rose 12 percent to $8.3 billion. That includes 2 million Xbox gaming consoles and 50 percent greater revenues, to $500 million, in the company's Surface tablet sales. Search ad revenue was up 38 percent.

Commercial division revenue rose 7 percent to $12.2 billion. Revenue from Office 365, the cloud-based version of Microsoft's office productivity software, more than doubled. The company's general cloud offering, Azure, saw 150 percent revenue growth.

After a long lull in the stock price, investors are growing more optimistic about Microsoft's prospects. Although three firms downgraded the stock from buy to hold last year, two -- Deutsche Bank and Barclays -- upgraded it in January, suggesting that their clients buy.

One of Microsoft's weaknesses has been its history, which is built into everything it does. On one hand, it has meant deference to the Windows operating system and Office product lines, given their ongoing ability to print money.