Microsoft’s monster quarter and strong outlook cements its status as an AI leader
Microsoft shares increased in expanded transactions on Wednesday after reporting a three -month strong results fueled by a acceleration in the income increase in technology giant, cloud information. An optimistic prediction for the current period has strengthened the progress of the stock. According to LSEG data, income increased by 18% annually in the fourth quarter of 2025 to $ 76.4 billion in the fourth quarter, and according to LSEG data, 73.8 billion dollars defeated the street consensus estimation. LSEG data, earnings per share, increased by 24% compared to last year. Microsoft continues to join NVIDIA’s other club name NVIDIA at the special market value club of $ 4 trillion with more than 8% shares for extended transactions on Wednesday. MSFT YTD Mountain Microsoft’s annual stock performance. As a result, if there is any doubt about Microsoft’s leadership in artificial intelligence, this quarter began to rest. The increase in income in the cloud computing unit accelerated for the second quarter of Azure in a row and significantly exceeded Wall Street’s consensus estimation. In the CEO Satya Nadella’s earnings version, we gained more clarity about the scale of the work, as Azure announced that Microsoft has generated over $ 75 billion during the 2025 fiscal year and an annual increase of 34%. During the call for earnings, management stressed that cloud demand has exceeded the supply – a positive sign for future growth. Microsoft’s three -month income guidance ended in September – the first quarter of the 2026 fiscal year was better than expected. In addition, it is foreseen that capital expenditures that support the wider AI infrastructure thesis will be higher than expected. In general, club names such as Nvidia, GE Vernova and Eaton benefit from billions of dollars spent by technology giants to build new centers. There is a lot to like in Microsoft neighborhood, the stock movement can be understood in the transactions after work. However, it is an impressive response, thinking that the last earnings of the stock in April were almost flat and the Session of Wednesday is essentially closed at the highest level of all time. This created a high bar for the gains that could barely pass last week despite the solid results of the Google parent alphabet. However, these figures are much better than the alphabet, we have seen Microsoft in the last few weeks, making an exception for the “response to the theme of earnings”. In the meantime, other club name meta platforms are an exception after the Dynamite neighborhood is notified on Wednesday night. In addition, Microsoft’s cloud results and Meta’s advertising revenue increase are positive signs for Amazon’s cloud and advertising segments before the earning report on Thursday evening. How online sales progress in the middle of a cautious consumer will be the swing factor in this report. Microsoft price target is better than expected, we increase guidance and strong AI expenditures to $ 600. 2 We repeat our ratings, so to buy from retreats. Three -month interpretation efficiency and business processes reported the biggest income estimates and better activity income than expected. Business margins are equal to approximately 250 basis points and 2.5 percent. Microsoft 365 commercial cloud income increased by 18% each year with an increase in income per user directed by M365 Copilot and E5. Seats increased by 6% annually. The company said that the Copilot applications family exceed 100 million active users per month through commercial and consumer, but it is unclear that a few are paid users. Microsoft 365 consumer cloud income growth increased by 20% to year, while subscribers rose from 87.7 million to 89 million quarters ago. LinkedIn income increased by 9% and all business lines have increased. Dynamics 365 revenue increased by 23% from the year to the year of growth in all workloads. Smart Cloud reported a strong income shot of approximately $ 1 billion, but operating revenue expectations are approximately $ 340 million and the activity margin is contract with approximately 70 basis points compared to last year. Azure. Wow. The increase in income from Azure and other cloud services increased to 39%, and the previous guidance on an increase of 34.4% on a fixed money basis and an increase of 34% to 35% of the analyst’s association was broken down. It gives a clearer picture as a result of the continuous currency, because it reveals the effects of fluctuating exchange rates. Azure’s consequences were better than the more rise investors, also called the purchasing side expectations. In the call, Nadella and CFO Amy Hood thought how they believed that they were leaders in the AI infrastructure and that they took a share every three months in the fiscal year. They also presented more than 100 data centers and data centers in 70 countries. According to Nadella, this is more than all the other cloud provider. However, these data centers seem to be able to build fast enough. Hood said that demand is still higher than supply. The rulers also presented three reasons why Azure was significantly better than expected for two quarters in a row: 1) Migrations from in -house servers; 2) Scholarship of cloud-local applications; and 3) New AI workloads. The more personal information process segment reported that there was an increase of 9% in revenues and that it was estimated. Business revenue increased significantly compared to last year, but the estimates fell approximately $ 237 million. All main businesses reported annual income increases with an increase of Windows OEM and their devices with an increase of 3%; Xbox content and services 13%; and search and news ads (old traffic -winning costs) increase by 21%. Bing search is also a higher marginal product and helps the larger segment to expand the operating margins of 436 basis last year. Guidance for the first quarter of the 2026 fiscal year was better than expected. In the midpoint of the appearance of each segment, the management revenue expects a total of $ 75.25 billion and exceeds the consensus of $ 74.18 billion. The biggest source of income was in the segment of productivity and business, but the smart cloud unit was a stroke. Secondly, Microsoft Azure expects an increase in revenue to be about 37% in the fixed currency. This is a slight slowing from the reported quarter, but still above 33.7%consensus. Microsoft envisions to be restricted in the first half of the financial year. The Capex expects to invest more than $ 30 billion in the first quarter – a big step in the first quarter of the 2025 financial year. The rapid tempo of the expenses used to attract the anger of the market, but Microsoft would not have invested much if it had not been visible to demand to support it. Microsoft ended with a quarter of the “remaining performance obligation” or a workload of $ 368 billion. Approximately 35% of this will be recognized for income in the next 12 months. This accumulation and the last increase in Azure income increase in the last two quarters add reliability to Management’s Capex strategy. Throughout the financial year, the company has provided a high level of guidance for the increase in double -digit income and operating income increase as well as its relatively unchanging operating margins. The company did not give an estimate of a Capex for the full financial year, but if it spent 30 billion dollars in every quarter, the full year amount would be 120 billion dollars, and it would be significantly above the 90.7 billion dollars of FactSet Consensus estimation. (Jim Cramer’s philanthropist trust is long Msft, Nvda, Gev, Etn, Meta and Amzn. Look here for the full list of stocks. Jim is waiting for 45 minutes after sending a trade warning before buying or selling a share in the portfolio of charitable confidence. If Jim talked about a stock on CNBC TV, he’s waiting for 72 hours after trading warning before trading. The above investment club information is subject to our conditions and conditions and our Privacy Policy with the waiver. There is no confidence or duty or not, as you receive any information provided in connection with the Investment Club. A specific result or profit is not guaranteed.
