Microsoft’s AI and Cloud Growth Push Q4 Earnings Past Expectations
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Microsoft’s cloud and AI strategy looks to be paying off, as the company posted strong Q4 earnings. The Redmond tech giant eported $76.4 billion in revenue and $3.65 in adjusted earnings per share, exceeding Wall Street’s expectations.
Microsoft CEO Satya Nadella credited AI and cloud as the core drivers of growth across industries. “Cloud and AI is the driving force of business transformation across every industry and sector,” said Satya Nadella, CEO of Microsoft. “We’re innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75 billion in revenue, up 34 percent, driven by growth across all workloads.”
That cloud boost showed up in the Intelligent Cloud segment, which pulled in $29.8 billion, beating analyst estimates. Accordin g to the company, as more businessesare looking towards AI tools, the demand is still outpacing the capacity.
It’s worth noting that Microsoft’s shares jumped over 6% after the report, with pre-market trading pushing it even higher. Analysts say Microsoft’s real AI growth story will be something to watch out for in 2026. That’s when large-scale rollouts of its AI tools like Copilot are expected to ramp up. Not to forget, Microsoft’s partnership with OpenAI is under some serious tension.
OpenAI’s plan to restructure its for-profit division may affect Microsoft’s expected equity stake. If talks break down, OpenAI could lose out on $20 billion in funding, which would ripple through Microsoft’s broader AI strategy. Only time will tell how things will pan out for the Redmond giant.
