Microsoft’s (MSFT) stock was up as much as 10% after the technology giant delivered financial results that beat Wall Street forecasts.
The Seattle-based company announced earnings per share (EPS) of $4.74 U.S., which topped the $4.24 U.S. consensus expectation of analysts.
Revenue in what was the company’s fiscal fourth quarter totaled $90.01 billion U.S., which was ahead of the $87.62 billion U.S. anticipated on Wall Street. Sales were up 18% year-over-year.
Management at Microsoft cited a $3.2 billion U.S. gain from the company’s investment in artificial intelligence (A.I.) startup Anthropic as giving its latest financial results a boost.
Importantly, Microsoft’s Intelligent Cloud segment posted $39.31 billion U.S. of revenue in the latest quarter, up 31.6% from a year ago.
The Azure cloud computing unit grew 43% year-over-year and its revenue in the 2026 fiscal year exceeded $100 billion U.S. for the first time.
Microsoft’s Azure cloud computing unit trails Amazon Web Services (AMZN) but remains larger than Alphabet’s (GOOGL) Google Cloud segment.
Looking ahead, Microsoft projected 45% Azure revenue growth in the current quarter, above Wall Street consensus estimates of 41%.
Executives at Microsoft also highlighted that there are more than 30 million paid subscribers for its Microsoft 365 Copilot A.I. work assistant. There were 20 million in April of this year.
Capital expenditures, which is money mostly spent on A.I., totaled $41 billion U.S. for the latest quarter, up 69% from a year earlier.
However, unlike rival Alphabet, Microsoft’s free cash flow did not turn negative in the quarter. The company announced free cash flow of $19.64 billion U.S., down 23% from a year ago.
Management said they expect to remain free cash flow positive in fiscal 2027. Microsoft reiterated its 2026 capital expenditure forecast of $175 billion U.S. but did not raise it.
The company forecast $89.85 billion U.S. to $90.95 billion U.S. in revenue for the current quarter, which would be up 16% at the midpoint. Analysts expected $89.66 billion U.S. of sales.
If there was one blemish on the latest earnings, it was Microsoft’s Xbox video game unit, where revenue declined 10% from the same period in 2025.
Earlier in July, Microsoft announced job cuts the closure of four video game studios tied to the Xbox division.
Prior to today (July 30), MSFT stock had declined 24% over the past 12 months to trade at $390.54 U.S. per share.
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