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Microsoft (MSFT) shares climbed after the company reported stronger-than-expected fourth-quarter earnings, supported by higher revenue growth and strong performance from its Azure cloud business.
The company exceeded Wall Street estimates for revenue and earnings per share while reporting increased demand for AI services. Shares rose more than 8% in premarket trading after the results.
Investors reviewed Microsoft’s latest performance as the company continued expanding its cloud infrastructure, AI products, and enterprise software services.
According to the earnings report, Microsoft posted adjusted earnings per share of $4.74, above analyst expectations of $4.24. Revenue reached $90.01 billion, compared with the expected $87.62 billion.
The company’s net income reached $35.77 billion, up from $27.23 billion during the same period last year. Microsoft reported growth across its main business segments, supported by cloud services and enterprise demand.
Meanwhile, Microsoft’s Intelligent Cloud segment generated $39.31 billion in revenue, exceeding analyst expectations of $38.16 billion. The segment includes Azure that recorded strong growth during the quarter.
Azure revenue increased 43% year over year on a constant currency basis. The company also confirmed that Azure revenue exceeded $100 billion during fiscal 2026 for the first time.
Microsoft Chief Executive Officer Satya Nadella said, “AI is transforming every layer of the technology stack,” as the company continued expanding AI features across its products and services.
Microsoft reported continued growth in its AI-related products. The company said Microsoft 365 Copilot paid seats increased to more than 30 million, up from over 20 million in April.
The Productivity and Business Processes segment, which includes Office, Dynamics, and LinkedIn, generated $37.85 billion in revenue. The figure increased 14.3% year over year and exceeded analyst expectations.
In addition, Microsoft reported that GitHub Copilot reached 50 million users as demand for AI-powered coding tools increased. The company continues integrating AI features across enterprise software products.
Microsoft’s capital expenditure plans also attracted attention during the earnings report. The company maintained its 2026 spending outlook at about $175 billion, mainly focused on AI infrastructure and data center expansion.
Chief Financial Officer Amy Hood said, “Demand signals across our portfolio” support further investment in AI infrastructure during the next fiscal year.
Notably, Microsoft issued a positive revenue outlook for the next quarter. The company expects first-quarter fiscal 2027 revenue between $89.85 billion and $90.95 billion. The forecast compares with analyst expectations of $89.66 billion. Microsoft also expects Azure growth to continue, projecting constant currency growth of 45% for the quarter.
The company reported commercial remaining performance obligations of $678 billion representing contracts that have not yet been recognized as revenue. The figure increased from the previous quarter as enterprise commitments expanded.
Nevertheless, Microsoft continues managing higher costs linked to AI infrastructure development. Capital spending rose as the company added data centers and computing capacity to support cloud and AI services.
The company also returned capital to shareholders during the quarter through dividends and stock buybacks. Microsoft distributed $10.2 billion through these programs.
Meanwhile, Microsoft’s More Personal Computing segment, which includes Windows, Surface, Bing, and Xbox, generated $12.85 billion in revenue. The segment declined year over year but exceeded market expectations.
Microsoft’s latest results come as major technology companies increase AI investments. The company’s earnings showed continued growth in cloud services, AI products, and enterprise software demand.
Also Read: Microsoft Stock Heads for the Worst Month Since 2000 Despite Strong Earnings
