Azure crosses $100B as Microsoft beats on earnings

Microsoft ↗ 0.52% delivered a blockbuster fiscal fourth quarter on July 29, reporting revenue of $90 billion — an 18% year-over-year increase that exceeded analyst expectations by roughly $2.4 billion — while Azure crossed $100 billion in annual revenue for the first time.spglobal+1

The results sent the stock surging approximately 15%, adding around $450 billion in market capitalization in what amounted to the largest single-day gain in the company's history.tradingkey

Azure and Cloud Lead the Way

Azure revenue grew 43% year-over-year in the quarter ending June 30, 2026, pushing the Intelligent Cloud segment to $39.31 billion in quarterly revenue and $137.8 billion for the full fiscal year. Adjusted diluted earnings per share came in at $4.74, beating the consensus estimate of $4.24 by roughly 12%.ad-hoc-news+2

Microsoft Cloud revenue overall climbed 27% to $59.3 billion, while commercial remaining performance obligations — essentially contracted future revenue — jumped 84% to $678 billion. CEO Satya Nadella highlighted that the company's custom Maia 200 AI accelerator chip delivered a 40% improvement in inference throughput for Copilot models, a development he framed as central to the company's efficiency gains.tradingkey+2

AI Monetization Takes Shape

The quarter provided evidence that Microsoft's AI spending is translating into commercial returns. Paid Microsoft 365 Copilot seats grew from roughly 20 million to 30 million in 90 days, a 50% increase, while GitHub Copilot reached 50 million users. The company's AI business hit an annual recurring revenue run rate above $37 billion, a 123% increase from the prior year.cryptobriefing+2

CFO Amy Hood kept calendar 2026 capital expenditures at approximately $175 billion, down from earlier expectations of $190 billion, by extending the assumed useful life of data-center properties. The move was read by markets as a sign of improved cloud efficiency.tradingkey+1

Guidance and Risks Ahead

For Q1 FY2027, management guided revenue of $89.85 billion to $90.95 billion and projected Azure growth of approximately 45% at constant currency — well above the 41% consensus. Management expects double-digit revenue and operating income growth for FY2027, with operating margins declining less than one percentage point.spglobal+1

According to S&P Global Market Intelligence ↗ 1.01%, analysts have since raised FY2027 Intelligent Cloud estimates by 3.1%. However, Bloomberg reported that roughly 70% of Microsoft's AI revenue is tied to OpenAI, a concentration risk flagged by Deutsche Bank ↘ 4.50% analysts who noted about 45% of the $625 billion backlog is connected to the AI lab.ad-hoc-news+2