The software giant reported revenue of $90.01 billion for its fiscal fourth quarter, up 18% year-on-year and comfortably above Wall Street's $87.62 billion target. Net income climbed to $35.77 billion from $27.23 billion a year earlier. Earnings per share reached $4.74, beating the $4.24 consensus.
The headline number carried a stark illustration of how quickly the AI landscape is shifting. Microsoft logged a $3.2 billion unrealized gain on its stake in Anthropic, after the rival lab's valuation rocketed from roughly $350 billion to $900 billion during the quarter. Yet the same results included a $600 million writedown tied to its far larger bet on OpenAI — a reminder that Microsoft's AI portfolio is now a mixed bag even as it expands.
Azure was the engine of the quarter. The cloud platform crossed $100 billion in annualized revenue, a milestone that Microsoft Chief Executive Satya Nadella framed as proof that enterprise AI adoption is translating into durable cloud spending. On the earnings call, Nadella described a constant balancing act: devoting chips to internal model training and the Copilot assistant means fewer available for Azure customers to rent.
Chief Financial Officer Amy Hood said commercial remaining performance obligations rose 8% to $678 billion, driven increasingly by customers outside the AI-model-developer cohort. Capital expenditure and leases hit $41 billion for the quarter, up 69% year-on-year, though Hood's decision to hold the full-year capex outlook steady — rather than raise it — was treated as a relief by investors.
Even with the post-earnings jump, Microsoft's stock remains down about 19% for the year, lagging the broader market. Deutsche Bank analysts flagged lingering "concentration risk," noting that some $45 billion of Microsoft's booked future revenue is tied to OpenAI's trajectory even as open-source models gain ground.
