Microsoft has reported strong fiscal fourth-quarter earnings, beating Wall Street expectations on both revenue and profit, largely driven by the rapid growth of its cloud business.
The tech giant posted adjusted earnings per share of $3.65 on revenue of $76.4 billion, surpassing analyst forecasts of $3.37 EPS and $73.89 billion in revenue, according to Bloomberg. This compares with EPS of $2.95 and revenue of $64.72 billion during the same quarter last year.
Shares of Microsoft jumped more than 8% in premarket trading, pushing the company closer to becoming only the second firm globally to reach a $4 trillion market valuation.
CEO Satya Nadella attributed the impressive results to the company’s strength in artificial intelligence and cloud services. “Cloud and AI is the driving force of business transformation across every industry and sector,” Nadella said. He highlighted Azure’s performance, noting that the cloud platform exceeded $75 billion in annual revenue, growing 34% year-over-year.
Microsoft’s Intelligent Cloud segment, which includes Azure, generated $29.8 billion in the quarter, ahead of the $29.09 billion analysts had expected. The company acknowledged that demand continues to exceed available capacity, signaling ongoing expansion potential.
The results follow Google’s own cloud-driven earnings boost last week, during which the company also announced an additional $10 billion investment in AI infrastructure. Microsoft is making similar aggressive AI investments, with Nadella promising continued innovation across its tech stack.
Analysts believe Microsoft’s AI push is only beginning. Wedbush’s Dan Ives said fiscal 2026 will be the “true inflection year” for AI growth as enterprise deployments accelerate. BofA’s Brad Sills pointed to the company’s AI-powered Copilot software as the next major growth driver.
Microsoft’s early backing of OpenAI has positioned it as a leader in the AI race, although tensions have emerged over OpenAI’s evolving corporate structure and Microsoft’s equity stake in the company.
Still, investors appear focused on Microsoft’s strong fundamentals and AI roadmap, with confidence running high that the tech giant will remain at the forefront of the digital transformation era.
