Anthropic · Copilot · Meta · Microsoft · Wall Street · Amazon · Fortune Technology
Microsoft’s cloud growth accelerates, and so too does the spending
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Microsoft’s cloud business is humming even as its spending to build out its AI business continues to be high.
Key facts
- 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
- In July, Microsoft cut about 4,800 jobs, following more than 15,000 layoffs in 2025
- Microsoft is one of several so-called hyperscalers spending big to meet AI compute demands, with Amazon, Microsoft, Google-parent Alphabet, and Meta Platforms collectively expected to devote more
- In its previous quarterly report, Microsoft said it expected its calendar 2026 capital expenditures to be roughly $175 billion
Summary
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 Azure cloud business grew by 48%, ahead of analyst estimates and a welcome sign for investors. 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.