Microsoft’s (MSFT) latest financial results beat Wall Street forecasts on both the top and bottom lines.
The technology giant reported fiscal first quarter earnings per share (EPS) of $3.72 U.S., which topped the $3.67 U.S. expected among analysts.
Revenue in the period totaled $77.67 billion U.S., which was ahead of the $75.33 billion U.S. consensus expectation of analysts. Sales were up 18% from a year earlier.
Management said the solid results were mainly due to a 40% revenue increase in the company’s Azure cloud computing business.
Cloud computing is now the biggest driver of growth at Microsoft as the business has proven to be a beneficiary of the artificial intelligence (A.I.) boom.
Despite the strong print, Microsoft’s stock is down 2% after management said on their earnings call that capital expenditures will accelerate going forward.
Microsoft also disclosed that its investment in OpenAI resulted in a $3.1 billion U.S. hit to its net income in the latest quarter, equal to $0.41 U.S. per share.
In terms of guidance, Microsoft said that it expects revenue in the current quarter to range between $79.5 billion U.S. and $80.6 billion U.S.
The middle of that range, $80.05 billion U.S., is ahead of the $79.95 billion U.S. expected among analysts.
Management also said that they expect Azure cloud computing growth of 37% in the current quarter, inline with analysts’ consensus forecasts.
Capital expenditures, most of which is spent on A.I., came in at $34.9 billion U.S. in the just completed quarter. That’s ahead of the $30 billion U.S. the company said it planned to spend.
Senior executives said on the call with analysts and media that the capex growth rate in 2026 will be above the rate in 2025. Previously they said there would be a slowdown next year.
Microsoft’s earnings were released as the company dealt with a global outage of Azure and its 365 services, both of which were down for hours in what appears to have been a cyberattack.
Prior to today (Oct. 30), MSFT stock had gained nearly 30% this year to trade at $541.55 U.S., near an all-time high.
