Record revenue and cloud growth, with accelerating AI adoption and a robust FY 2027 outlook
Microsoft Profits Jump 31% as Azure Cloud Sales Surpass $100 Billion
MSFT 0.00%↑ Microsoft Q4 FY26 (June quarter):
• Azure +43% fx neutral.
• Revenue +18% Y/Y to $90.0B ($2.4B beat).
• Gross margin 67% (-1pp Y/Y)
• Operating margin 45% (flat Y/Y).
• EPS $4.74 ($0.50 beat).
$MSFT backlog added $45B, up 81% YoY
Google Cloud v. Microsoft Azure
Q2 Revenue Growth:
GCP +82%
Azure +43%
Microsoft statements:
"This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats"
Microsoft also reported a $3.2B gain from their investment in Anthropic.
MSFT 0.00%↑ on the risk of AI overcapacity:
“If the demand environment changes, you just slow down what is the largest component of spending: CPUs and GPUs.”
“Land and data center builds are a smaller percentage of the overall cost structure, and the timing of those investments can be changed.”
“We have a large first-party application business that also uses the capacity we’re building, in addition to the Azure platform. That gives us significantly more flexibility to manage through changes in demand.”
$MSFT on improving data center deployment speed: “We improved the lead time for getting CPUs and GPUs plugged in over the past 90 days. At the scale we’re operating, efficiency improvements that can be quickly monetized result in acceleration within the quarter.”
$MSFT on why Azure growth is accelerating: “Demand continues to exceed available supply. When we make efficiency gains, they are quickly monetized within the quarter.” “We’re focused on being able to get more out of everything that we have in the fleet. That applies to efficiency gains across both the CPU fleet and the GPU fleet.”
Microsoft $MSFT on enterprise AI architecture:
“You’ve got to keep your harness separate from the model.”
“That means any given model, at any given time, is swappable.”
“You can’t depend on any one model.”
“You can’t be subject to the refusals of one model.”
“You can use frontier models. You can use multiple of them. You can use low-cost models, and train your own model when you don’t want to use any external model.”
$MSFT on OpenAI-related volatility: “The significant OpenAI contract signed in the prior year will result in some quarterly volatility in both bookings and RPO growth rates.”
Microsoft $MSFT on Azure demand:
“Customer demand continues to exceed supply.”
“Even with the strong close to Q4, we continue to expect first-half growth to accelerate.”
“We expect Q1 Azure revenue growth of 45% in constant currency.”
Outlook
Make sure people never get to read the last pages of your SEC filings, and all will be fine for $MSFT 😉
Technicals
Double bottom recently. Most probably, we might see the price rise.
Performance
1 year -24.24%,
YTD -19.37%,
AH: 7.19%
Forecast
That’s it for now.
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PS: Once again, this is not investment advice; it is for informational purposes only.