Microsoft’s shares jumped over 3% in after-hours trading following a quarterly report that beat expectations and showed an accelerating pace for its Azure cloud business. The company posted $90 billion in revenue for its fiscal fourth quarter, up 18% from the previous year’s $76.4 billion, surprising analysts who anticipated around $87.7 billion.
Azure and other cloud services revenue surged 43%, outpacing the roughly 40% growth analysts had predicted and accelerating from the 40% growth seen in the prior quarter. Microsoft Cloud revenue rose 27% to $59.3 billion. CEO Satya Nadella revealed that Azure’s annual revenue surpassed the $100 billion mark for the first time, a clear sign that Microsoft’s investment in AI-powered infrastructure is paying off.
Microsoft 365 Copilot also hit 30 million paid seats, up from 20 million last quarter and beating forecasts of nearly 27 million. The company’s commercial remaining performance obligation jumped 84% to $678 billion, up from $627 billion last quarter, pointing to expanding demand beyond the usual US AI model leaders.
Operating income climbed 18% to $40.6 billion, while net income increased 31% to $35.8 billion. Earnings per diluted share came in at $4.81, surpassing the expected $4.24. Microsoft’s quarterly capital expenditures more than doubled year-over-year to $35.8 billion as it beefed up infrastructure for Azure and AI products, pushing full-year spending on property and equipment to $115.9 billion.
The strong cloud growth echoes broader industry trends, as seen in developments like South Korea’s plans to build more AI data centers aimed at supporting AI workloads.
Shares closed up over 3% in response to the upbeat earnings report.
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