Microsoft's Azure Revenue Grows 40%, Capital Expenditures Reach $34.9 Billion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 7h ago
0mins
Source: NASDAQ.COM
- Cloud Revenue Surge: Microsoft's 'Azure and other cloud services' revenue grew by 40% last quarter, indicating robust demand for cloud computing, which is expected to drive continued growth in the coming quarters.
- Commercial Backlog Soars: The company's commercial remaining performance obligations (RPO) increased over 50% year-over-year to nearly $400 billion, reflecting strong customer demand for cloud computing and highlighting the company's market potential in AI integration.
- Rising Capital Expenditures: Capital expenditures reached $34.9 billion last quarter, with management forecasting that the growth rate for fiscal 2026 will exceed that of fiscal 2025, which may pressure profitability but underscores commitment to cloud and AI investments.
- Strong Cash Flow: Despite rising expenditures, Microsoft's free cash flow hit $25.7 billion last quarter, up 33% year-over-year, indicating the company's ability to maintain solid cash flow amidst strong revenue growth.
Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MSFT is 631.36 USD with a low forecast of 500.00 USD and a high forecast of 678.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 451.140
Low
500.00
Averages
631.36
High
678.00
Current: 451.140
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
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.
