Microsoft's Azure Revenue Grows 40%, Commercial Backlog Nears $400 Billion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 24 2026
0mins
Should l Buy MSFT?
Source: Yahoo Finance
- Surging Cloud Demand: Microsoft's 'Azure and other cloud services' revenue soared 40% year-over-year last quarter, indicating a robust demand for cloud computing and AI capabilities, which enhances the company's revenue growth potential going forward.
- Significant Backlog Increase: The company's commercial remaining performance obligations (RPO) surged over 50% to nearly $400 billion, reflecting strong customer interest in cloud computing and signaling sustained growth in the coming quarters.
- Rising Capital Expenditures: Microsoft reported capital expenditures of $34.9 billion last quarter, with expectations that growth in fiscal 2026 will outpace that of fiscal 2025, which may pressure profitability but underscores ongoing investments in cloud and AI offerings.
- Substantial Free Cash Flow Growth: Despite rising expenditures, Microsoft's free cash flow reached $25.7 billion last quarter, up 33% year-over-year, demonstrating the company's ability to maintain strong cash flow amidst robust revenue growth.
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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: 420.770
Low
500.00
Averages
631.36
High
678.00
Current: 420.770
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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