Microsoft Jumps 8% After Q4 Beat; Azure Hits $100B Milestone on July 30

Microsoft rose 8% in after-hours trading on July 29 after reporting fiscal fourth-quarter revenue of $90 billion, beating analyst estimates of $87.62 billion. The company’s Azure cloud business crossed $100 billion in annual revenue for the first time, growing 41% year-over-year. Net income surged 31% to $35.8 billion, and diluted earnings per share reached $4.81, up 32% from the prior year.

Azure reaches $100 billion milestone amid AI demand surge

Azure revenue surpassed $100 billion for the first time in fiscal 2026, up 41% from $75 billion the prior year. The cloud segment grew 43% in the quarter ended June 30, accelerating from 39% growth two quarters prior. CEO Satya Nadella attributed the acceleration to customer demand for AI infrastructure and services. Microsoft 365 Copilot, the company’s AI assistant, reached over 30 million paid seats, with net seat additions more than doubling quarter-over-quarter.

Strong earnings offset market turmoil and AI spending concerns

Microsoft’s Q4 results beat on all major metrics despite a broad market selloff. The Dow fell 1,100 points and Nasdaq dropped 2% on July 29 after the Federal Reserve held interest rates steady. Investors have worried that massive AI capex spending by tech giants will not generate returns quickly enough. Microsoft’s beat and guidance helped counter that narrative, with shares rising 8% after-hours while the broader market declined.

Capital spending to accelerate as AI infrastructure needs grow

Microsoft’s capital expenditures jumped 70% year-over-year to $41 billion in Q4, driven by customer demand for cloud and AI services and higher component costs. The company maintained its 2026 calendar-year capex guidance at approximately $175 billion and signaled that fiscal 2027 capex will grow year-over-year. Microsoft cited demand for AI infrastructure as the primary driver of increased spending.

Concentration risk with OpenAI tempered by platform flexibility

Microsoft faces concentration risk tied to its OpenAI relationship, which accounted for approximately 45% of the company’s $625 billion in commercial remaining performance obligations as of January 2026. However, Nadella emphasized during the earnings call that the company’s platform architecture allows enterprises to swap between frontier AI models, low-cost models, and custom-trained models. This design pattern ensures no single model can lock in a customer, reducing dependency on any one provider.

Final Thoughts

Microsoft’s beat on revenue, earnings, and Azure growth demonstrates strong AI adoption among enterprises. With Meyka grading the stock a B+ and 18 of 21 analysts rating it a buy, the data supports continued upside despite valuation headwinds and near-term capex intensity.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.