Microsoft reported quarterly revenue of $90bn for the April-June period, an 18% year-on-year increase that beat analyst expectations of $87.62bn, as its cloud computing business grew at its fastest pace since early 2022. Azure revenue rose 43% during the quarter, exceeding the roughly 40% growth analysts had anticipated, and surpassed $100bn in annual revenue for the first time in the fiscal year ended June. Net income climbed 31% to $35.8bn, while diluted earnings per share of $4.81 topped the $4.24 consensus estimate.

The company attributed the performance to strong demand for its Azure infrastructure and first-party AI applications, as well as the adoption of its AI assistant Microsoft 365 Copilot, which now has more than 30 million paid users — up from roughly 20 million three months earlier. Chief executive Satya Nadella said the results reflected "the confidence customers are placing in us to power their AI transformation." The acceleration in Azure and Copilot licensing helped reassure investors that Microsoft's heavy spending on AI infrastructure was translating into measurable revenue, a concern that had weighed on the stock, which had fallen about 18% this year before the earnings release.

Capital expenditure in the quarter reached $41bn, up 70% from a year earlier, though slightly below the $42bn analysts had expected. Microsoft revised its forecast for calendar year 2026 capital spending to roughly $175bn, down from a previous $190bn, but chief financial officer Amy Hood said the change was due to an accounting adjustment and that the company's actual investment expectations remained unchanged. Hood noted that demand for cloud services continued to outstrip available supply, and she projected Azure growth would accelerate further to around 45% in the current quarter.

The results contrast with those of other major tech firms that have been penalised by investors for rising AI spending without commensurate returns. Meta reported a 14% drop in net income to $15.8bn on Wednesday, and its shares fell as much as 12% in after-hours trading. Alphabet last week raised its full-year capital expenditure forecast to $205bn, sending its stock down 6%. Amazon is scheduled to report its quarterly results on Thursday. Microsoft shares rose roughly 8% in after-hours trading on Wednesday, closing the regular session at $390.54.