Microsoft said its Azure cloud business surpassed $100 billion in annual revenue in its recently-ended fiscal year, cheering investors in the company even as the broader market plunged on worries over AI spending and U.S. inflation.
Cloud growth in Microsoft’s fiscal fourth quarter increased 43% percent year-over-year, providing a boost to overall quarterly revenue of $90 billion, above analyst estimates of $87.7 billion.
Azure, the core of Microsoft’s cloud business, surpassed $100 billion in annual revenue for the first time ever this fiscal year, rising 33% over last year’s $75 billion, Microsoft said. The gain helps cement Microsoft’s Azure as a leading cloud giant behind Amazon Web Services, and as one of the most prominent providers of the infrastructure undergirding the AI era.
Shares of Microsoft rose more than 8% in after-hours trading, following a broad market selloff in regular trading Wednesday after the U.S. Federal Reserve held interest rates steady. The Dow Jones Industrial Average plunged by more than 1,100 points on Wednesday while the tech-laden Nasdaq 100 fell more than 2%. Tech stock have taken a drubbing in recent days over fears that rising capital expenditures among big AI-focused tech firms won’t translate into returns fast enough.
Microsoft appears hopeful to counter that narrative with its quarterly and fiscal year-end results. In a statement, CEO Satya Nadella cited customer demand for AI as driving the growth in Azure and helping Microsoft’s 365 Copilot service reached over 30 million paid seats.
The company’s 2026 financial results show that revenue was $331.8 billion for the fiscal year, while net income was $133.7 billion, up 31% over last year. Earnings per share rose 32% to $17.95, although EPS was helped along by a $3.2 billion gain from Microsoft’’s investment in Anthropic and nearly $5 billion in gains from its investment in OpenAI during the year. However, the gains the $2.9 trillion tech giant saw were partially offset by severance expense and impairment charges in video game business Xbox.
For the fourth quarter, revenue rose to $90 billion, up 18% year over year. Net income surged 31% to $35.8 billion. Diluted earnings per share reached $4.81, up 32%.
Microsoft Cloud, which includes Azure and other cloud businesses, was the driver of much of the quarterly growth, which spun up $59.3 billion in the quarter, a 27% increase. The commercial remaining performance obligations—a figure that shows signed customer agreements that haven’t yet turned into revenue—was $678 billion, up 84%.
