Microsoft (MSFT) shares surged more than 8% in premarket trading after the company reported stronger-than-expected fiscal fourth-quarter earnings, driven by robust cloud demand and AI services. The tech giant posted adjusted earnings per share of $4.74, surpassing analyst expectations of $4.24, while revenue reached $90.01 billion, above the $87.62 billion consensus.
Net income rose to $35.77 billion, up from $27.23 billion in the same period last year, as growth accelerated across key business segments. The Intelligent Cloud segment generated $39.31 billion in revenue, exceeding the $38.16 billion forecast, with Azure revenue growing 43% year over year on a constant currency basis. Notably, Azure revenue exceeded $100 billion for the first time during fiscal 2026.
“AI is transforming every layer of the technology stack,” said Microsoft CEO Satya Nadella, as the company continues to embed artificial intelligence across its product portfolio. Microsoft 365 Copilot paid seats climbed to more than 30 million, up from 20 million in April, while GitHub Copilot reached 50 million users, reflecting surging demand for AI-powered coding tools.
The Productivity and Business Processes segment, which includes Office, Dynamics, and LinkedIn, generated $37.85 billion in revenue, up 14.3% year over year and above analyst estimates. Meanwhile, the More Personal Computing segment, encompassing Windows, Surface, Bing, and Xbox, brought in $12.85 billion, a slight decline year over year but still ahead of market expectations.
Microsoft maintained its fiscal 2026 capital expenditure outlook at approximately $175 billion, primarily allocated to AI infrastructure and data center expansion. CFO Amy Hood noted that “demand signals across our portfolio” support continued investment. The company also issued a positive revenue forecast for the first quarter of fiscal 2027, projecting revenue between $89.85 billion and $90.95 billion, compared with the analyst estimate of $89.66 billion. Azure growth is expected to remain strong, with constant currency growth of 45% projected for the quarter.
Commercial remaining performance obligations reached $678 billion, reflecting expanding enterprise commitments. Microsoft also returned $10.2 billion to shareholders through dividends and stock buybacks during the quarter.
Microsoft’s results come as major technology companies ramp up AI investments, underscoring the strategic importance of cloud and AI capabilities in driving enterprise growth.
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