Microsoft's Azure Cloud Business Crosses $100 Billion In Annual Revenue, Up 41% As AI Demand Accelerates

Microsoft reported fiscal fourth quarter results that beat Wall Street expectations, driven by accelerating growth in its cloud computing and artificial intelligence businesses. The standout number in Microsoft's fiscal year 2026 report card was Azure, which passed $100 billion in annual revenue and grew 41 percent for the year, according to the company's earnings release. Microsoft Cloud revenue for the full year exceeded $214 billion, up 27 percent, cementing cloud computing as the company's primary growth engine even as it continues to pour billions into AI infrastructure.

Microsoft earnings and revenue beat estimates

For the June quarter, Microsoft posted revenue of $90.01 billion, up 18 percent year over year, comfortably ahead of the $87.62 billion analysts polled by LSEG had expected. Adjusted earnings per share came in at $4.74, well above the $4.24 consensus estimate. Net income for the quarter stood at $35.77 billion, or $4.81 per share, up sharply from $27.23 billion, or $3.65 per share, in the same period last year.

For the full fiscal year, Microsoft's revenue rose 18 percent to more than $331 billion, while operating income climbed 21 percent to over $155 billion. The company's press release stated that fiscal year 2026 was its strongest year yet.

AI investments continue to pay off

Microsoft's results were also boosted by gains tied to its investments in artificial intelligence companies. Net income and diluted earnings per share for the year benefited from gains linked to the company's stake in OpenAI. A quarterly filing also pointed to a gain of over $three billion from Microsoft's investment in AI lab Anthropic, according to a CNBC report on the earnings.

Not every segment shone equally

The performance across Microsoft's business units was uneven. Its Productivity and Business Processes segment, which includes Office and LinkedIn, posted 37.8 billion dollars in revenue for the quarter. Meanwhile, sales of devices and Windows licenses to device makers declined seven per cent, in line with a broader slump in personal computer shipments. Xbox revenue fell 10 percent during the quarter, a period in which the gaming unit also announced job cuts and said four studios would be spun out.

Outlook remains upbeat

Microsoft guided for first quarter fiscal 2026 revenue of between $89.85 billion and $90.95 billion , which would represent 16 percent growth, ahead of the $89.66 billion analysts had projected. The company also said it expects to maintain steady capital expenditure levels through 2026 as it continues to build out AI and cloud infrastructure, a signal that its aggressive AI spending is beginning to translate into returns.

Published on: Thursday, July 30, 2026, 08:49 AM IST