Microsoft’s cloud growth accelerates, and so too does the spending
Microsoft's cloud business is experiencing accelerated growth, with first-quarter revenue reaching $92.3 billion, a 19% year-over-year increase, surpassing Wall Street analyst expectations. The company's profit also exceeded predictions, totaling $36.6 billion. This growth comes as Microsoft continues to invest heavily in building out its AI business.
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PublishedOffset at this time: UTC+0Oct 29, 2026, 21:00 UTC
IngestedOffset at this time: UTC+0Oct 30, 2026, 00:00 UTC
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Microsoft’s cloud business is humming even as spending to build out its AI business remains high.
The software giant’s first-quarter earnings report Wednesday showed ample demand for its AI services, as Microsoft races to put more computing capacity online and as other parts of its business, such as legacy software and gaming, lag.
The Redmond, Wash.-based company said first-quarter revenue totaled $92.3 billion, up 19% year-over-year and above what Wall Street analysts expected. Its profit was $36.6 billion, also edging out analyst predictions.
Its Azure cloud business grew by 48%, ahead of analyst estimates and a welcome sign for investors. The company’s shares were trading up around 2.5% in after-hours trading. Microsoft investors have been eager to see Azure continue to grow at a high clip and for the company to prove that its AI bets, such as its Copilot assistant, are generating solid revenue. Both are important metrics because they show whether Microsoft, and the AI industry in general, is sustaining demand, especially as tech giants spend gobs of cash on building data centers.
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