By Microsoft shares MSFT rose in after-hours trading on Wednesday after the company reported better-than-expected quarterly revenue and earnings, supported by accelerating growth in its Azure cloud-computing business.
The stock jumped 4.3% to $554.25 in extended trading after closing roughly flat at $531.01.
Microsoft reported revenue of $92.28 billion for its fiscal first quarter, up 18.8% from a year earlier and above analysts’ expectations of $90.62 billion, according to FactSet.
Earnings per share reached $4.92, compared with the $4.72 expected by analysts.
The company reported net profit of $36.63 billion, up from $27.75 billion in the year-ago quarter.
On an adjusted basis, Microsoft earned $4.89 per share, exceeding analysts’ forecast of $4.71.
Azure growth exceeds expectations
Azure was a key driver of Microsoft’s quarterly performance, with growth accelerating to 48% in the September quarter.
The result exceeded Microsoft’s own forecast of 44% to 45% growth and the roughly 47% rate that analysts identified as the expected figure among institutional investors.
Microsoft disclosed Azure’s revenue in dollar terms for the first time in its latest earnings report.
The business generated $33.16 billion during the quarter.
Overall, Microsoft Cloud revenue increased 30% year over year to $63.9 billion.
The company also introduced a new Agent and Infra reporting segment following a restructuring of its reporting structure in September.
The segment, which includes Azure and Microsoft 365 products among other sources, generated $76.8 billion in revenue.
The results helped ease concerns about whether Microsoft’s substantial investments in artificial intelligence infrastructure would translate into stronger financial returns.
AI spending remains in focus
Investors continue to assess whether the hundreds of billions of dollars that major technology companies are committing to AI will generate sufficient returns.
Microsoft lowered its calendar-year 2026 capital expenditure forecast to about $175 billion from roughly $190 billion last quarter.
The company made the adjustment after extending the estimated useful life of its data centres and office buildings from 15 years to 25 years.
The spending outlook remains important as technology companies expand computing capacity to support AI services.
At the same time, data-centre construction has faced growing public and political opposition in parts of the United States.
New York Governor Kathy Hochul ordered a temporary ban on large data-centre construction in July, while Pennsylvania Governor Josh Shapiro signed an executive order introducing restrictions on new projects earlier this year.
Workforce changes add to broader industry pressures
Microsoft’s results come as large companies face pressure to reduce workforce costs while increasing investment in artificial intelligence.
The company said on Monday that it was extending buyout offers to a section of its workforce. Around 60,000 employees are eligible for the programme, according to a person familiar with the matter cited by The Wall Street Journal.
Microsoft employed 223,000 people at the end of June.
In April, the company offered voluntary retirement buyouts to around 8,600 employees, with more than 30% accepting the offer.
Microsoft expects a much lower acceptance rate for the latest programme.
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