Microsoft's Azure Cloud Grows 40%, Outpacing AWS
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Source: NASDAQ.COM
- Azure Growth: Microsoft's Azure and other cloud services revenue grew 40% year-over-year in Q3 FY2026, up from 39% the previous quarter, demonstrating strong competitiveness in the cloud market, particularly amid surging AI demand.
- Overall Cloud Performance: Microsoft's total cloud revenue reached $54.5 billion, a 29% increase, with its AI business surpassing a $37 billion annual run rate, reflecting a remarkable 123% growth and indicating significant potential returns from AI investments.
- Capital Expenditure Plans: Microsoft expects capital expenditures to total about $190 billion this year, a 61% increase, and despite facing margin pressures from data center depreciation, its operating margin remains strong at 46.3%, showcasing robust profitability.
- AWS Acceleration: Amazon's AWS revenue rose 28% year-over-year in Q1 FY2026, marking the fastest growth in 15 quarters; although its cloud growth lags behind Microsoft's, it still reflects strong market demand and profitability potential.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 378.910
Low
500.00
Averages
631.36
High
678.00
Current: 378.910
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. The Company’s segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services. This segment primarily comprises: Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The Intelligent Cloud segment consists of server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub; and Enterprise Services, including enterprise support services, industry solutions and Nuance professional services. The More Personal Computing segment primarily comprises Windows, Devices, Gaming, and search and news advertising.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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