Overview
- Microsoft reported a $392 billion cloud backlog for fiscal Q1 2026, a 51% increase from a year earlier.
- Azure revenue grew about 40% in the quarter, underscoring strong demand relative to current infrastructure.
- The company is building additional data center compute to convert long-term customer commitments into revenue.
- The article warns that if backlog expansion outpaces capacity additions, some clients could consider other cloud providers.
- Outside Azure, Productivity and Business Processes revenue rose 17% to $33 billion, and Intelligent Cloud posted a $30.9 billion run rate with 28% year-over-year growth.