Sales in the period ended March 31 rose to $41.7 billion, the Redmond, Washington-based software maker said Tuesday in a statement. That compared with the $41.1 billion average estimate of analysts polled by Bloomberg. Still, analyst projections ranged as high as $41.9 billion, with some saying recent gains in the stock had inflated expectations beyond the consensus numbers.

Microsoft’s Azure, which sells internet-based computing services to corporations, saw sales climb by 50%, matching the gain posted in the previous quarter. While Azure has been growing steadily, it faces steep competition for big deals from Amazon.com Inc., the dominant cloud service, and Google. A global semiconductor shortage has also constrained sales of Xbox consoles following the release of a new machine late last year.

“The Street was hoping for a stronger top-line beat,” said Dan Ives, an analyst at Wedbush. “Although Azure came in ahead of Street expectations and that remains key for the bulls.”

Net income in the recent period was $15.5 billion, or $2.03 a share, Microsoft said. Analysts had predicted $1.78.

Microsoft shares dropped about 3% in extended trading following the report. The stock has increased more than 50% in the past year, and the company’s market value is approaching $2 trillion as investors maintain their enthusiasm about Chief Executive Officer Satya Nadella’s reinvention of the software maker, centered on growth in cloud-based software and services.

“Microsoft stock has made a big run and is trading at elevated multiples based on all key valuation metrics,” said Daniel Morgan, senior portfolio manager at Synovus Trust Co.

Commercial cloud sales rose 33% to $17.7 billion, Microsoft said. Gross margin in that segment widened 3 percentage points to 70%, mostly due to an accounting change, the company said in a slide posted on its website. Microsoft said revenue in the Intelligent Cloud unit rose to $15.1 billion.

The pandemic caused some companies to speed up moves to the cloud and accelerated upgrades to internet-based collaboration software, like Microsoft’s Office suite and Teams. Sales in the Productivity and Business Processes division were $13.6 billion, a jump of 15%.

Microsoft saw increased customer allegiance to its cloud services with longer and more extensive Azure deployments and Office cloud customers adding seat licenses for more users, Chief Financial Officer Amy Hood said in an interview.

“We’re adding seats, we’re selling additional products and you’re seeing more workloads be committed to Azure over time,” she said. “It’s a good sign of commitment to the overall platform of the Microsoft cloud.”

Revenue in the More Personal Computing unit rose 19% to $13 billion. PC sales, once a drag on Microsoft’s results, have picked up as buyers upgrade gear for school and work, especially in comparison to the year-earlier period, when the pandemic hurt production and purchasing. Overall PC shipments rose 32% in the quarter, according to Gartner Inc.

Still, a worldwide chip shortage is causing constraints of PC availability, Hood said, and is limiting Microsoft’s ability to build enough of the new Xbox console models introduced in November. While Xbox hardware sales grew 232% in the recent period, inventory of those machines remains tight, and that will continue into the June quarter, Hood said.