The Nasdaq fell nearly 2% on Tuesday as e-commerce specialist Shopify announced it was laying off 10% of its workforce to help it navigate worse-than-expected demand for its platform. This spooked tech investors as they wondered what else may be on the horizon this earnings season. With this backdrop, combined with a generally tough year for tech stocks, investors were likely hoping software giant Microsoft (MSFT -1.27%) could provide some upbeat news on Tuesday when it reported earnings.

While Microsoft unfortunately posted top- and bottom-line results below the consensus analyst estimates for the two metrics, there's still a lot to like about the report. But seeing the silver lining requires a different perspective. For instance, the results are solid in light of the stock's more conservative valuation following a 25% decline in the stock price this year. Further, a close look at the report reveals that Microsoft's cloud-computing business, Azure, is still growing at a high growth rate.

Solid consolidated performance

Microsoft's revenue for its fiscal fourth quarter, which ended on July 26, rose 12% year over year to $51.9 billion. On a constant currency basis, however, revenue rose 16% year over year. Also weighing on reported growth was a tough year-ago comparison; revenue in the year-ago period rose 21% year over year.

Net income for the period was $16.7 billion, translating to earnings per share of $2.23. This key per-share profitability metric compared to $2.17 in the year-ago quarter. On a constant currency basis, earnings per share rose 8% year over year.

Azure's revenue is soaring

Microsoft's cloud computing business had a standout quarter. The software company's "Azure and other cloud services" segment saw revenue increase 40% year over year, or 46% in constant currency. It's worth noting that the rate isn't far from the 49% constant-currency growth Azure saw in the period ending three months earlier. Growth rates like this are warmly welcomed by investors at a time of heightened global economic uncertainty.

A cheaper valuation makes these results impressive

There would have been times in the past where results like this could have been concerning. In 2020, for instance, Microsoft had a price-to-earnings ratio greater than 40 at one point. A sky-high valuation like this demands not just good but spectacular results. But one of the benefits of the Nasdaq's 26% decline this year is that stocks are trading at more sensible valuations.

Microsoft's fiscal fourth-quarter results show a tech company performing well in the face of a tough year-ago comparison, currency headwinds, and an uncertain operating environment. Even more, the company's net profit margin of 32% is a breath of fresh air as investors grapple with continued losses from many of the younger tech companies that saw their share prices run higher in 2020 and 2021 before crashing in 2022. Microsoft's robust profits and healthy balance sheet are likely more appreciated today than they were a few years ago.

With notable business performance during a tough time, investors should take a closer look at Microsoft to see if the company is worth investing in while shares are trading at a reasonable valuation.