Microsoft shares sustained a nearly 7% rally at Wednesday’s open, a day after reporting third-quarter results that beat analyst expectations on the top and bottom lines.

Shares held their gains after a British regulator blocked Microsoft’s planned acquisition of video game company Activision Blizzard on Wednesday morning.

The company reported third-quarter earnings per share of $2.45, beating the consensus estimate of $2.23 per share, and revenue of $52.86 billion, versus the analyst expectation of $51.02 billion. Microsoft also issued strong guidance for its upcoming fiscal quarter.

Microsoft also signaled continued optimism for growth in artificial intelligence. “As with any significant platform shift, it starts with innovation, and we’re excited about the early feedback and demand signals from the AI capabilities we’ve announced to date,” Microsoft Chief Financial Officer Amy Hood said on the company’s earnings call.

Analysts responded positively to Microsoft’s AI prospects.

“We believe Microsoft is one of the most compelling investment opportunities in the technology industry and across sectors,” Goldman Sachs analyst Kash Rangan wrote in an investor note Tuesday. Goldman Sachs rates Microsoft as a buy, with a price target of $335.

Morgan Stanley reiterated its overweight rating on the stock and increased its price target to $335. “Microsoft’s differentiated positioning in Public Cloud and Generative AI, along with a unique ability to deliver consolidated solutions, drives shares gains and out-performance against street expectations,” Morgan Stanley analyst Keith Weiss wrote in a post-results investor note.

CNBC’s Michael Bloom contributed to this report.