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.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy MSFT?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
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: 399.600
Low
500.00
Averages
631.36
High
678.00
Current: 399.600
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.
OPENAI NEARS COMPLETION OF INITIAL COMMITMENTS FOR $100 BILLION MEGA FUNDING ROUND - THE INFORMATION
OpenAI's Funding Round: OpenAI is finalizing its first commitments for a significant funding round amounting to $100 billion.
Investment Impact: This mega round is expected to enhance OpenAI's capabilities and accelerate its development in artificial intelligence technologies.
See More
Microsoft to Invest $50 Billion to Expand AI Access in Global South
- Massive Investment: Microsoft announced at the India AI Impact Summit its plan to invest $50 billion by the end of the decade to enhance AI access in Global South countries, demonstrating its commitment to emerging markets and long-term growth.
- Five-Part Strategic Plan: The company's five-part strategy includes empowering schools and nonprofits through technology and skills, strengthening multilingual and multicultural AI capabilities, enabling local AI innovations to meet community needs, and measuring AI diffusion to guide future policies and investments, aiming to enhance AI's societal impact comprehensively.
- Food Security Initiative: Microsoft also unveiled a new AI initiative aimed at strengthening food security across Sub-Saharan Africa, starting in Kenya and designed for regional scalability, reflecting its focus on addressing local challenges through technology.
- Global AI Gathering: India is set to host one of the world's largest AI gatherings, with Prime Minister Modi aiming to position the country as a key player in the global race for advanced AI models, attracting top executives from major tech firms including Microsoft, thereby enhancing India's influence in the global AI landscape.
See More
Market Volatility Increases as Linde Hits All-Time High
- Increased Market Volatility: The market is experiencing heightened volatility as President Trump indicated that Iran has 'about 10 days' to reach a nuclear deal, leading to uncertainty and a potential break in the S&P 500's three-day winning streak.
- Linde Hits All-Time High: In a down market, industrial gas giant Linde's stock reached an all-time high on Thursday, gaining approximately 14.5% so far in 2026, reflecting a growing investor preference for hard assets amid market uncertainty.
- CEO Buying Signals: Linde's CEO Sanjiv Lamba purchased $1 million worth of stock on December 8, resulting in a 25% increase in share price since then, highlighting the positive impact of executive buying on investor sentiment.
- Upcoming Economic Data: Friday will see the release of significant economic data, including the PCE price index and fourth-quarter GDP, which market participants should closely monitor for potential impacts on future market trends.
See More
AI Agents and the Software Crisis
Best Trade in 2026: The most profitable investment strategy in 2026 has been to buy semiconductor stocks while selling software companies.
Performance of Semiconductor Stocks: The iShares Semiconductor ETF has increased by 19% in 2026, following a 40% gain in 2025.
Struggles of Software Companies: In contrast, software companies have faced significant losses, with the iShares Expanded Tech-Software Sector ETF down 22% this year.
Quarterly Decline: The software sector also experienced an 8% decline in the fourth quarter of the previous year.
See More
Microsoft Confident in Quantum Computing Commercialization by 2029
- Confidence in Quantum Commercialization: Microsoft’s VP of Quantum, Zulfi Alam, expressed confidence during a CNBC discussion that by 2029, machines with commercial value will be available, marking a significant shift from experimental research to practical deployment that could reshape the computing industry.
- Transformation through Hybrid Systems: Alam highlighted that hybrid quantum-classical computing systems will drive the practical application of quantum technology, with data centers expected to host quantum machines capable of performing calculations beyond classical machines by the end of the decade, enhancing enterprise computing capabilities.
- Key Industry Milestones: As 2030 approaches, investors should monitor quantum companies like IonQ, D-Wave, and Rigetti, which have made significant advancements in various quantum technology sectors, positioning themselves for potential market leadership in the future.
- Government Collaboration and Applications: Infleqtion’s quantum computers and sensor systems are already deployed with the U.S. Department of Defense, NASA, and the UK government, showcasing the practical application potential of quantum technology in government and military sectors, further bolstering industry confidence.
See More
Magnificent Seven Stocks Decline Impacting Wealth in 2026
- Wealth Decline: As of early 2026, the combined wealth of the world's top ten billionaires has decreased by $45.6 billion year-to-date, illustrating the direct impact of the declining Magnificent Seven stocks on the fortunes of tech giants like Musk and Bezos.
- Market Performance: In 2025, all seven Magnificent Seven stocks saw gains, with six achieving double-digit increases, but the trend reversed in 2026, leading to a general market downturn and diminished investor confidence.
- Investment Dynamics: Berkshire Hathaway sold 77% of its Amazon stake in Q4 2025, while Bill Ackman's Pershing Square Capital increased its Meta holdings and Amazon exposure, indicating diverging investor sentiments towards these tech stocks.
- Future Outlook: Despite the downward pressure, analysts believe that Alphabet and Tesla will continue to attract investor interest in 2026, especially as their strategic relevance remains intact, making the risk-reward profile increasingly appealing.
See More
OPENAI NEARS COMPLETION OF INITIAL COMMITMENTS FOR $100 BILLION MEGA FUNDING ROUND - THE INFORMATION
OpenAI's Funding Round: OpenAI is finalizing its first commitments for a significant funding round amounting to $100 billion.
Investment Impact: This mega round is expected to enhance OpenAI's capabilities and accelerate its development in artificial intelligence technologies.
See More
Microsoft to Invest $50 Billion to Expand AI Access in Global South
- Massive Investment: Microsoft announced at the India AI Impact Summit its plan to invest $50 billion by the end of the decade to enhance AI access in Global South countries, demonstrating its commitment to emerging markets and long-term growth.
- Five-Part Strategic Plan: The company's five-part strategy includes empowering schools and nonprofits through technology and skills, strengthening multilingual and multicultural AI capabilities, enabling local AI innovations to meet community needs, and measuring AI diffusion to guide future policies and investments, aiming to enhance AI's societal impact comprehensively.
- Food Security Initiative: Microsoft also unveiled a new AI initiative aimed at strengthening food security across Sub-Saharan Africa, starting in Kenya and designed for regional scalability, reflecting its focus on addressing local challenges through technology.
- Global AI Gathering: India is set to host one of the world's largest AI gatherings, with Prime Minister Modi aiming to position the country as a key player in the global race for advanced AI models, attracting top executives from major tech firms including Microsoft, thereby enhancing India's influence in the global AI landscape.
See More
Market Volatility Increases as Linde Hits All-Time High
- Increased Market Volatility: The market is experiencing heightened volatility as President Trump indicated that Iran has 'about 10 days' to reach a nuclear deal, leading to uncertainty and a potential break in the S&P 500's three-day winning streak.
- Linde Hits All-Time High: In a down market, industrial gas giant Linde's stock reached an all-time high on Thursday, gaining approximately 14.5% so far in 2026, reflecting a growing investor preference for hard assets amid market uncertainty.
- CEO Buying Signals: Linde's CEO Sanjiv Lamba purchased $1 million worth of stock on December 8, resulting in a 25% increase in share price since then, highlighting the positive impact of executive buying on investor sentiment.
- Upcoming Economic Data: Friday will see the release of significant economic data, including the PCE price index and fourth-quarter GDP, which market participants should closely monitor for potential impacts on future market trends.
See More
AI Agents and the Software Crisis
Best Trade in 2026: The most profitable investment strategy in 2026 has been to buy semiconductor stocks while selling software companies.
Performance of Semiconductor Stocks: The iShares Semiconductor ETF has increased by 19% in 2026, following a 40% gain in 2025.
Struggles of Software Companies: In contrast, software companies have faced significant losses, with the iShares Expanded Tech-Software Sector ETF down 22% this year.
Quarterly Decline: The software sector also experienced an 8% decline in the fourth quarter of the previous year.
See More
Microsoft Confident in Quantum Computing Commercialization by 2029
- Confidence in Quantum Commercialization: Microsoft’s VP of Quantum, Zulfi Alam, expressed confidence during a CNBC discussion that by 2029, machines with commercial value will be available, marking a significant shift from experimental research to practical deployment that could reshape the computing industry.
- Transformation through Hybrid Systems: Alam highlighted that hybrid quantum-classical computing systems will drive the practical application of quantum technology, with data centers expected to host quantum machines capable of performing calculations beyond classical machines by the end of the decade, enhancing enterprise computing capabilities.
- Key Industry Milestones: As 2030 approaches, investors should monitor quantum companies like IonQ, D-Wave, and Rigetti, which have made significant advancements in various quantum technology sectors, positioning themselves for potential market leadership in the future.
- Government Collaboration and Applications: Infleqtion’s quantum computers and sensor systems are already deployed with the U.S. Department of Defense, NASA, and the UK government, showcasing the practical application potential of quantum technology in government and military sectors, further bolstering industry confidence.
See More
Magnificent Seven Stocks Decline Impacting Wealth in 2026
- Wealth Decline: As of early 2026, the combined wealth of the world's top ten billionaires has decreased by $45.6 billion year-to-date, illustrating the direct impact of the declining Magnificent Seven stocks on the fortunes of tech giants like Musk and Bezos.
- Market Performance: In 2025, all seven Magnificent Seven stocks saw gains, with six achieving double-digit increases, but the trend reversed in 2026, leading to a general market downturn and diminished investor confidence.
- Investment Dynamics: Berkshire Hathaway sold 77% of its Amazon stake in Q4 2025, while Bill Ackman's Pershing Square Capital increased its Meta holdings and Amazon exposure, indicating diverging investor sentiments towards these tech stocks.
- Future Outlook: Despite the downward pressure, analysts believe that Alphabet and Tesla will continue to attract investor interest in 2026, especially as their strategic relevance remains intact, making the risk-reward profile increasingly appealing.
See More
