Quick Read
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Microsoft’s Azure crossed $100B in annual revenue for the first time, growing 43%, as Microsoft posted Q4 EPS of $4.81, up 32%, topping Wall Street estimates.
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NVIDIA stands as a key beneficiary as Microsoft committed to continued GPU investment while capex of $41B came in below the $42B feared by analysts.
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Previously, GOOGL dropped 6% after Alphabet’s Google raised its capex outlook to $205B, making Microsoft’s spending restraint the clearest market reward of the earnings season.
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Shares of Microsoft (NASDAQ:MSFT) are up 9% in early Thursday trading, changing hands at $427 after the software giant delivered a fiscal fourth-quarter blowout and crossed a symbolic Azure milestone. The pop lifts the stock off Wednesday’s $390.54 close and pushes it back toward levels last seen in the spring.
As of yesterday’s close, Microsoft stock was down 19% year to date (YTD), so this reads more like a relief rally in a beaten-down mega-cap than a fresh breakout. The move follows Wednesday afternoon’s earnings release, and it’s driving strength across AI-linked names.
Investors are digesting what the earnings report says about cloud capex, Copilot monetization, and the broader mega-cap earnings setup heading into Amazon’s report. That framing sets up the rest of the reaction across the AI complex.
Azure Tops $100B and Q4 Blows Past Estimates
Microsoft posted fiscal Q4 2026 revenue of $90 billion, up 18%, ahead of the $87.62 billion consensus. Microsoft’s diluted earnings per share landed at $4.81, up 32%, or $4.74 excluding a gain tied to the OpenAI investment.
The centerpiece was Azure. Growth accelerated to 43% from 40% the prior quarter, and Azure crossed $100 billion in revenue for the full fiscal year for the first time. Microsoft Cloud revenue reached $59.3 billion, up 27%, and commercial remaining performance obligations jumped 84% to $678 billion. Management also disclosed more than 30 million paid Copilot seats.
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The bigger relief was on spending. Microsoft’s capital expenditures including leases came in at $41 billion, below the $42 billion feared. CFO Amy Hood stated that capex will grow further in fiscal 2027 while the company stays free-cash-flow positive, and Microsoft is extending the useful life of office and data center buildings to 25 years from 15. Microsoft’s fiscal Q1 2027 revenue guidance of $89.85 billion to $90.95 billion also topped Street models.
