Microsoft Reports 40% Azure Revenue Growth Amid $31.9 Billion Capex Surge and Mixed Quarterly Results

Microsoft's revenue from Azure and other cloud services surged 40% in the recent quarter, exceeding analyst expectations. 8%. 27 billion consensus from StreetAccount analysts.

01 billion in revenue, up about 17%. 43 billion. Microsoft now has over 20 million seats for the 365 Copilot artificial intelligence add-on for commercial Office subscriptions, up from 15 million seats disclosed in January.

"Weekly engagement is now at the same level as Outlook as more and more users make Copilot a habit," CEO Satya Nadella said on Microsoft's earnings call. The company's annualized revenue from AI stands at $37 billion, reflecting a 123% increase. This includes business from clients running AI services on Azure, revenue from model builders, and income from Microsoft's own AI tools, but excludes AI systems using standard central processing units, storage and other services without model builders.

9 billion in quarterly capital expenditures and finance leases, marking a 49% increase. 9 billion expected by analysts polled by Visible Alpha. 6%, the narrowest since 2022, amid rising depreciation costs tied to data center infrastructure expansion.

19 billion in revenue, down 1%. 73 billion. Sales of Windows licenses to device makers and Microsoft's own devices decreased 2%, even as technology industry researcher Gartner estimated PC shipments increased by 4% during the quarter.

6 billion monthly active Windows devices, Nadella stated on the earnings call. The company reported $627 billion in commercial remaining performance obligations, which include unearned revenue and amounts to be recognized as revenue, up $2 billion from the prior quarter. During the quarter, the most senior Office software leader, Rajesh Jha, announced plans to retire.

Gaming chief Phil Spencer also announced plans to retire. CNBC reported these developments as part of Microsoft's quarterly updates. As of Wednesday's close, Microsoft stock was down 12% so far in 2026, following its worst quarterly performance since 2008.

In contrast, the Nasdaq was up 14% for the month as of Wednesday's close. Tech stocks have drawn investor interest despite rising oil prices and supply chain disruptions from the war in Iran. U.S. began combat operations in Iran in late February.

M. Wall Street has continued investing in the sector amid concerns over costs for AI infrastructure.