Microsoft Reports Strong Q4 Earnings with Azure Growth and Revised Capex Guidance
Microsoft (MSFT) reported strong fiscal Q4 earnings for 2026, delivering better-than-expected results that sent its stock sharply higher after the market close. The company maintained a $175 billion capex budget for calendar year 2026 but revised accounting practices by reclassifying data center leases from finance to operating leases and extending asset lifespans. These changes reduced reported capital expenditures without altering actual spending levels. Azure revenue growth accelerated, rising 43% YoY compared to the previous quarter's 40%, surpassing analyst expectations of 41.4%. Microsoft expects Azure revenues to grow by 45% in the current fiscal quarter and has now crossed $100 billion in annualized cloud revenue for the first time. CFO Amy Hood highlighted strong demand signals across the portfolio, with commercial RPO growth driven entirely by customers outside major AI model developers like OpenAI. The company also expects to maintain positive free cash flow despite increased investments.
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Topics: AI Infrastructure Capex Guidance Earnings Report Microsoft