Microsoft quarterly results top expectations

"They moved the market. They came in with expectation set they were going to be a little soft this quarter in front of the Windows 7 release. The fact they came out and exceeded both the top and bottom line has fueled this move higher.

"This was their first big product release in some time, a lot of people were looking for this quarter to be not quite as strong, you see the huge revenue upside, big EPS beat, they are taking their operating expense guidance lower. All in all they are setting up for a stronger move with this release of Windows 7."

BRENDAN BARNICLE, SENIOR ANALYST, PACIFIC CREST SECURITIES

"You are seeing some of the benefit of the improvement in PCs that we have heard about, also some of the benefit is improvement in server unit sales, and you have a huge improvement in Xbox.

"This is a trend. They've got some good momentum behind them and it's just going to get accelerated now that you have Windows 7 out in the market.

"I had lower numbers and I thought we may get some upside, but not this much. These are fantastic numbers."

(Reporting by Juan Lagorio, Chuck Mikolajczak, Paul Thomasch, Jim Finkle and Leah Schnurr, compiled by Tiffany Wu)