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EsMicrosoft Beats Forecasts on Cloud and AI; Shares Jump 9%
Microsoft topped estimates with $90 billion in revenue and $4.81 EPS, as Azure grew 43% and paid AI users increased; shares rose 9% after hours.
Microsoft reported April–June results on Wednesday, posting $90 billion in revenue and earnings of $4.81 per share, above forecasts. After-hours trading lifted the stock about 9% to $426.03.
Revenue increased 18% from a year earlier. Analysts expected $87.62 billion in revenue and $4.24 per share in earnings. Microsoft Cloud revenue reached $59.3 billion, up 27% year over year, reflecting demand for Azure, first-party AI applications and services embedded in productivity and developer tools.
Azure and other cloud services grew 43%, alongside growth in paid AI users. In a statement, CEO Satya Nadella wrote: “This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their AI transformation.”
On spending plans, Chief Financial Officer Amy Hood told investors that capital investment expectations for calendar 2026 are unchanged. Due to an accounting presentation change, the guidance now shows approximately $175 billion, compared with a prior figure of $190 billion that included about $25 billion from higher component costs. Capital expenditures were $41 billion in the quarter.
Investor relations director Danielle Criste pointed to strong usage trends, noting, “We remain very confident in the long-term return on these investments, given these strong demand signals, the increasing product usage we’ve seen and the efficiencies that we’re driving across the platform.”
Bryan Hayes, an investment strategist at Zacks Investment Research, viewed the reaction as a shift in sentiment, stating, “For the first time in three quarters, the market appears willing to grant that the spending is buying something real.”
For the fiscal year ended in June, revenue totaled $331.8 billion. Management highlighted continued enterprise workload migration to Azure and early deployment of generative AI features, while Microsoft 365 added paying customers for Copilot.
The company reported demand across compute, data and AI services, with customers increasing cloud consumption as they roll out new AI-enabled applications.
Michael J. Wolf, founder and CEO of Activate Consulting, described Microsoft as “winning on both fronts” by supplying cloud capacity for enterprise AI and charging for AI tools embedded in workplace software.
