Microsoft’s stock rose 8% in extended trading following the disclosure of financial results for the fiscal quarter ending June 30. The company reported revenue growth of approximately 18% year over year, with net income reaching $35.77 billion, or $4.81 per share, compared with $27.23 billion, or $3.65 per share, in the corresponding period a year earlier. The company benefited from a $3.2 billion gain tied to its investment in artificial intelligence firm Anthropic and lower-than-anticipated expenses associated with a voluntary retirement initiative, though the Xbox gaming segment recorded an impairment charge.
Microsoft’s cloud computing division, Intelligent Cloud, generated $39.31 billion in revenue, up 31.6% year over year and exceeding analyst expectations. Azure, the company’s primary cloud platform, achieved 43% growth at constant currency, accelerating from 40% in the prior quarter. The company noted that Azure revenue surpassed $100 billion for the first time during fiscal 2026, representing a 41% increase. The Productivity and Business Processes segment, encompassing Office, Dynamics, and LinkedIn, produced $37.85 billion in revenue, up 14.3%. Microsoft reported more than 30 million paid seats for its Microsoft 365 Copilot work assistant, an increase from over 20 million as of earlier in the year.
Finance Chief Amy Hood reaffirmed capital spending commitments for 2026, projecting approximately $175 billion in capital expenditures and finance leases for the year. The company announced plans to extend the useful life of office and data center buildings to 25 years from 15 years, with additional data center leases transitioning to operating leases. Hood indicated expectations for further capital expenditure growth in the 2027 fiscal year, citing demand signals across the company’s product lines. The company’s forecast for fiscal first-quarter revenue ranged from $89.85 billion to $90.95 billion, representing 16% growth at the midpoint and slightly exceeding analyst consensus estimates.
Yearlong performance reflected market challenges for software stocks, as Microsoft shares declined 19% so far in 2026 while the S&P 500 index advanced approximately 7%. Analysts have highlighted concentration risks associated with the company’s relationship with OpenAI, as approximately 45% of Microsoft’s $625 billion in commercial remaining performance obligations tied to that partnership. Separately, the company’s More Personal Computing segment, which includes Bing, Surface, Windows, and Xbox, contributed $12.85 billion in revenue, down 4.4% year over year, with Xbox revenue declining 10%.
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