Microsoft shares jumped nearly 9% in after-hours trading Wednesday following a solid fiscal fourth-quarter earnings report. The stock initially slipped to $390.54 during regular trading, down from $393.35, but surged to about $425.21 after the earnings release.
Quarterly revenue climbed 18% year over year, reaching $35.77 billion in net income or $4.81 per share. This beat last year's $27.23 billion and $3.65 per share figures. The results included a $3.2 billion gain from Microsoft’s stake in AI company Anthropic and lower expenses linked to its voluntary retirement program.
Azure Drives Cloud Revenue Growth
Microsoft’s Intelligent Cloud division, which houses Azure, pulled in $39.31 billion, soaring 31.6% from the previous year and surpassing analyst estimates of $38.16 billion. Azure alone grew 43%, accelerating from last quarter’s 40%, and outpaced expectations as well. Microsoft’s annual Azure revenue exceeded $100 billion for the first time, underscoring continued demand for its cloud and AI services despite market doubts about generative AI disrupting established software firms.
The company plans to increase investment in AI infrastructure, with capital expenditures and finance leases rising 69% year over year to $41 billion this quarter. CFO Amy Hood indicated plans to boost spending to $175 billion in fiscal 2026, reflecting ongoing expansion in data centers and office facilities. Accounting changes will alter how some investments are classified, but expenses are expected to climb further in fiscal 2027 due to strong demand.
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