Microsoft Shares Surge on Strong Cloud and AI Growth
Microsoft's stock jumped nearly 9% in after-hours trading following a quarterly earnings report that exceeded analyst expectations. The company posted fiscal fourth-quarter revenue of $76.44 billion, marking an 18% increase year-over-year. Net income rose to $27.23 billion, or $3.65 per share, compared to $22.04 billion, or $2.95 per share, the previous year.
The standout performer was Microsoft's Intelligent Cloud segment, which includes Azure. Revenue here grew 26% year-over-year to $29.89 billion, surpassing analyst projections. This growth pushed Microsoft shares above last week's record highs, with the stock up about 22% so far in 2025.
Cloud and AI Driving Business Transformation
CEO Satya Nadella emphasized the role of cloud and artificial intelligence in transforming businesses across industries. Azure revenue alone surpassed $75 billion, up 34%, fueled by growth in all workloads. This quarter marked the first time Microsoft disclosed Azure's revenue scale in dollar terms, highlighting its increasing importance.
Outlook and Investment in AI Infrastructure
Looking ahead, CFO Amy Hood forecasted double-digit revenue growth for fiscal 2026. However, she noted ongoing challenges related to capacity constraints as the company expands its AI infrastructure.
Microsoft plans to increase capital expenditures to $30 billion in the upcoming fiscal first quarter, up from $20 billion a year earlier. This investment aims to expand data center capacity to meet rising demand. If the spending pace continues, annual capital expenditures could reach $120 billion, up from $88.2 billion in fiscal 2025. Hood mentioned that while growth in spending will remain strong in the first half of fiscal 2026, it is expected to moderate in the second half.
What This Means for IT and Finance Professionals
- Microsoft's growth signals continued demand for cloud services and AI solutions, which are becoming core to business operations.
- Investments in AI infrastructure may lead to new opportunities for IT professionals skilled in cloud computing and AI deployment.
- Finance teams should watch capital expenditure trends closely, as they reflect how Microsoft is positioning itself for future growth.
For professionals interested in expanding their AI and cloud expertise, exploring targeted training can be valuable. Resources such as Complete AI Training offer courses tailored to different skill levels and job roles, including those focused on Azure and AI technologies.
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