Microsoft (MSFT) ended its fiscal year with a resounding statement to Wall Street: the growth story isn’t slowing down.
In its fourth-quarter earnings report, the company delivered results that shattered analyst expectations, led by extraordinary performance in its cloud business, Azure. The software giant also became the second publicly traded company to reach a $4 trillion market valuation, trailing only Nvidia (NVDA).
In the three months ending in June, Microsoft reported $76.4 billion in revenue—up 18% year-over-year and well above consensus estimates. It marked the first time the company crossed the $75 billion quarterly revenue mark. Earnings per share came in at $3.65, handily beating forecasts of $3.37 and marking Microsoft’s largest bottom-line beat in nearly two years.
Azure Surges as Demand Outpaces Supply
At the heart of Microsoft’s outperformance was Azure. The cloud platform saw revenue rise 39% year-over-year in constant currency terms, surpassing both internal guidance and Wall Street’s expectations. This follows a similarly strong showing last quarter and signals sustained momentum.
Azure’s annual revenue surpassed $75 billion, representing 34% year-over-year growth. While that still trails Amazon Web Services in raw size—AWS generated $112 billion over the past year—Microsoft is closing the gap fast, thanks to its aggressive expansion and dominance in AI workloads.
Despite bringing more data centers online in the fourth quarter, Microsoft said demand for Azure continues to exceed capacity. The company expects this supply-demand imbalance to persist through the first half of fiscal 2026, pointing to potential further upside as infrastructure comes online.
In a nod to transparency, Microsoft broke from tradition and provided a specific revenue figure for Azure—underscoring its confidence in the business.
At the heart of Microsoft’s outperformance was Azure. The cloud platform saw revenue rise 39% year-over-year in constant currency terms, surpassing both internal guidance and Wall Street’s expectations. This follows a similarly strong showing last quarter and signals sustained momentum.
Azure’s annual revenue surpassed $75 billion, representing 34% year-over-year growth. While that still trails Amazon Web Services in raw size—AWS generated $112 billion over the past year—Microsoft is closing the gap fast, thanks to its aggressive expansion and dominance in AI workloads.
Despite bringing more data centers online in the fourth quarter, Microsoft said demand for Azure continues to exceed capacity. The company expects this supply-demand imbalance to persist through the first half of fiscal 2026, pointing to potential further upside as infrastructure comes online.
In a nod to transparency, Microsoft broke from tradition and provided a specific revenue figure for Azure—underscoring its confidence in the business.
AI, Capex, and New Frontiers
Artificial intelligence continues to be a major growth engine for Microsoft. CEO Satya Nadella emphasized that AI is becoming a core force across industries, and Azure AI services played a significant role in the quarter’s performance.
Microsoft’s total cloud revenue grew 27% to $46.7 billion, driven not only by Azure but by the broader Intelligent Cloud segment, which reached $29.8 billion in the quarter.
Capital expenditures soared to $24 billion in Q4 and are expected to exceed $30 billion in the current quarter as Microsoft builds out its AI infrastructure. That figure represents a significant year-over-year jump but is expected to moderate in the latter half of FY26 as deployment timing normalizes.
The company also continues to embed AI across its productivity tools, including Microsoft 365 and LinkedIn. Copilot, its AI-powered software assistant, is seen as a potential breakout product in the coming year. Microsoft now counts 1.2 billion LinkedIn members, with double-digit growth for four consecutive years.
Artificial intelligence continues to be a major growth engine for Microsoft. CEO Satya Nadella emphasized that AI is becoming a core force across industries, and Azure AI services played a significant role in the quarter’s performance.
Microsoft’s total cloud revenue grew 27% to $46.7 billion, driven not only by Azure but by the broader Intelligent Cloud segment, which reached $29.8 billion in the quarter.
Capital expenditures soared to $24 billion in Q4 and are expected to exceed $30 billion in the current quarter as Microsoft builds out its AI infrastructure. That figure represents a significant year-over-year jump but is expected to moderate in the latter half of FY26 as deployment timing normalizes.
The company also continues to embed AI across its productivity tools, including Microsoft 365 and LinkedIn. Copilot, its AI-powered software assistant, is seen as a potential breakout product in the coming year. Microsoft now counts 1.2 billion LinkedIn members, with double-digit growth for four consecutive years.
A $4 Trillion Valuation Becomes Reality
Microsoft’s strong financials sent shares soaring more than 5%, pushing its market capitalization past the $4 trillion threshold—making it just the second company in history to do so after Nvidia.
At over $540 per share, Microsoft’s stock is hovering near all-time highs, and the momentum doesn’t appear to be slowing. The company’s full-year revenue climbed to nearly $282 billion, while net income surged to $102 billion—each up dramatically since the start of the AI boom in late 2022.
Looking ahead, CFO Amy Hood reaffirmed expectations for double-digit revenue and operating income growth in FY26, highlighting continued confidence in Microsoft’s AI and cloud strategy.
Conclusion
Microsoft’s fourth-quarter results cement its leadership in cloud computing and artificial intelligence. While rivals like Google (GOOG) and Amazon (AMZN) continue to invest heavily, Azure’s accelerating growth rate, combined with a disciplined capital strategy and deep enterprise penetration, sets Microsoft apart. With AI integration spreading across its ecosystem and demand still outstripping capacity, Microsoft’s $4 trillion milestone may just be the beginning.
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