Overview
- Microsoft reported fiscal 2026 revenue of $331.8 billion and net income of $133.7 billion, with the results disclosed in late August.
- Azure crossed $100 billion in annual revenue and grew roughly 41–43% year over year, giving management multi‑quarter visibility through a $678 billion commercial remaining performance obligation.
- Capital spending jumped to about $116 billion in fiscal 2026 and management guided roughly $175 billion for the next year to build AI compute, a move that drove quarterly free cash flow down and creates near‑term cash pressure.
- Reported net income was materially helped by investment gains tied to OpenAI and Anthropic, which boosted headline profit but complicate comparisons to underlying operating performance.
- Shares rallied roughly 28–29% over a recent month while analysts debate valuation; reaching $600–$650 per share depends on sustaining high Azure growth, converting the backlog to higher‑margin software revenue, and a recovery in free cash flow.