European Investor
30 Jul 2026, 09:22
Microsoft Stock Jumps 8.3% as Azure and AI Growth Power Strong Q4 Earnings
Microsoft shares surged 8.3% in premarket trading on Thursday after the company reported stronger-than-expected fiscal fourth-quarter results, driven by accelerating Azure growth and continued demand for artificial intelligence products.
Revenue rose 18% year-over-year to $90.0 billion, while operating income increased 18% to $40.6 billion. GAAP net income climbed 31% to $35.8 billion, and diluted earnings per share increased 32% to $4.81. On a non-GAAP basis, Microsoft earned $4.74 per share, up 23%.
## Azure Growth Accelerates
The strongest part of the report came from Microsoft’s cloud operations. Microsoft Cloud revenue increased 27% to $59.3 billion, while Intelligent Cloud revenue rose 32% to $39.3 billion.
Azure and other cloud services revenue jumped 43%, highlighting continued demand for cloud infrastructure and AI computing capacity. Microsoft also said annual Azure revenue surpassed $100 billion for the first time.
Commercial remaining performance obligations surged 84% to $678 billion, providing investors with greater visibility into future contracted revenue.
AI adoption also continued to expand. Microsoft 365 Copilot reached more than 30 million paid seats, strengthening the company’s position as one of the leading beneficiaries of enterprise AI spending.
## Consumer and Gaming Businesses Remain Weak
Growth was less consistent across Microsoft’s consumer businesses. More Personal Computing revenue declined 4% to $12.9 billion, as Windows OEM and Devices revenue fell 7% and Xbox content and services revenue dropped 10%.
However, investors largely overlooked those declines as the performance of Azure, Microsoft Cloud and AI-related products reinforced confidence in the company’s long-term growth outlook.
Microsoft returned $10.2 billion to shareholders through dividends and share repurchases during the quarter.
## What to Watch
The sharp premarket gain reflects strong investor confidence in Microsoft’s ability to convert heavy AI investment into revenue growth. Attention will now turn to management’s fiscal 2027 guidance, capital expenditure plans and comments on whether Azure growth can remain above 40% as demand for AI infrastructure continues to rise.
Microsoft shares surged 8.3% in premarket trading on Thursday after the company reported stronger-than-expected fiscal fourth-quarter results, driven by accelerating Azure growth and continued demand for artificial intelligence products.
Revenue rose 18% year-over-year to $90.0 billion, while operating income increased 18% to $40.6 billion. GAAP net income climbed 31% to $35.8 billion, and diluted earnings per share increased 32% to $4.81. On a non-GAAP basis, Microsoft earned $4.74 per share, up 23%.
## Azure Growth Accelerates
The strongest part of the report came from Microsoft’s cloud operations. Microsoft Cloud revenue increased 27% to $59.3 billion, while Intelligent Cloud revenue rose 32% to $39.3 billion.
Azure and other cloud services revenue jumped 43%, highlighting continued demand for cloud infrastructure and AI computing capacity. Microsoft also said annual Azure revenue surpassed $100 billion for the first time.
Commercial remaining performance obligations surged 84% to $678 billion, providing investors with greater visibility into future contracted revenue.
AI adoption also continued to expand. Microsoft 365 Copilot reached more than 30 million paid seats, strengthening the company’s position as one of the leading beneficiaries of enterprise AI spending.
## Consumer and Gaming Businesses Remain Weak
Growth was less consistent across Microsoft’s consumer businesses. More Personal Computing revenue declined 4% to $12.9 billion, as Windows OEM and Devices revenue fell 7% and Xbox content and services revenue dropped 10%.
However, investors largely overlooked those declines as the performance of Azure, Microsoft Cloud and AI-related products reinforced confidence in the company’s long-term growth outlook.
Microsoft returned $10.2 billion to shareholders through dividends and share repurchases during the quarter.
## What to Watch
The sharp premarket gain reflects strong investor confidence in Microsoft’s ability to convert heavy AI investment into revenue growth. Attention will now turn to management’s fiscal 2027 guidance, capital expenditure plans and comments on whether Azure growth can remain above 40% as demand for AI infrastructure continues to rise.
