Microsoft Shares Rise After Earnings Report: Cloud Business Posts Best Growth Since 2022

Microsoft shares rose in after-hours trading after the company reported quarterly revenue that exceeded expectations. The cloud business was the main driver: the Azure segment grew at its fastest pace in the past four years.

The Intelligent Cloud segment, which includes Azure, generated $39.3 billion in revenue for Microsoft in the fourth quarter of fiscal year 2026, which ended on June 30—a 32% increase from the previous year. Growth for Azure and other cloud services accelerated to 43%—the best result since early 2022, according to Bloomberg. In the previous quarter, Azure revenue grew by 40%. For fiscal year 2026, Azure revenue exceeded $100 billion for the first time.

Microsoft Cloud's revenue totaled $59.3 billion, up 27% year-over-year. Remaining Performance Obligations (RPO) rose 84% to $678 billion.

Microsoft also reported that the number of paid Microsoft 365 Copilot seats has exceeded 30 million. Back in July, there were more than 20 million. According to Microsoft CEO Satya Nadella, this reflects customers’ trust in the company as a provider of AI transformation solutions.

Microsoft's stock jumped more than 3% in after-hours trading following the release of its earnings report, reaching $404.4. During regular trading hours, the stock fell 0.7% to $390.5.

Microsoft's revenue for the quarter rose 18% compared to the same period last year, totaling $90 billion. The LSEG consensus estimate was $87.62 billion, according to CNBC. Adjusted earnings per share were $4.74. Microsoft’s net income rose 31% year-over-year to $35.77 billion.

Several one-time factors influenced the quarter’s results. Microsoft reported a $3.2 billion gain from its investment in the AI lab Anthropic, as well as lower-than-expected costs associated with the company’s first-ever voluntary retirement program. This effect was partially offset by layoff costs and write-downs in the Xbox division.

The Productivity and Business Processes segment, which includes Office applications, Dynamics, and LinkedIn, reported revenue of $37.8 billion—up 14% from a year earlier. The More Personal Computing segment, which includes Windows, Xbox, Surface, and Search, generated $12.9 billion in revenue—down 4% from a year earlier. Within this segment, Xbox revenue from content and services declined by 10%, while Windows OEM and Devices revenue fell by 7%. Search advertising revenue, excluding traffic acquisition costs, grew by 10%.

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