Microsoft (MSFT  ) was 2% lower after hours following its second-quarter earnings report. The company beat consensus for the top and bottom-line. However, shares were off as its cloud division showed some deceleration.

Inside the Numbers

Microsoft reported $1.46 a share on $38 billion in revenue for the quarter. Both figures were above analysts' estimates of $1.38 per share and $36.6 billion. Compared to the second quarter last year, earnings were 7% higher, and revenue was 13% higher. Due to work from home and kids learning from home, more people are using Microsoft's products and services.

Microsoft's growth continues to be impressive especially since it's already so big at $1.6 trillion. In contrast, the S&P 500 (SPY  ) as a whole is growing sales at 3%, and earnings are expected to be 13% lower than last year. Despite these superior numbers, Microsoft's valuation is only slightly more expensive at 37 compared to the S&P 500's 28. It also pays a 1% dividend which is above the 10-year yield's 0.58%.

Cloud Division

The fastest-growing part of Microsoft is its cloud division. Due to more people working from home and taking classes from home, demand for cloud computing has also increased. Microsoft offers a full, cloud stack including security and compliance to enable companies to shift their digital operations to the cloud.

Revenue in the Intelligence Cloud segment increased by 17% to $13.4 billion with most of the growth coming from servers and Azure. Growth for Azure slowed to 47% from 59% in the previous quarter which marks continued deceleration. Overall, it said that commercial cloud division had generated $50 billion in revenue over the past 12 months.

In recent years, Microsoft's dominance in cloud computing has been the catalyst behind the stock's big gains. It's slowly shifting away from focusing on consumers to focusing on businesses as its customer base. In line with this move, it recently shut down its physical stores.

Stock Price

Another factor weighing on the stock price was that guidance of $35.6 billion was slightly lower than expectations of $35.9 billion. This equates to revenue growth of 8%. Microsoft did see more negative impact from the coronavirus this quarter than last quarter as search revenue declined due to a drop in ad spend among businesses on the Bing search engine.

Microsoft's stock has been one of the best-performing stocks over the last decade. It's up nearly 60% since the bottom in March and more than 800% since 2013.