Microsoft shares surged as much as 9% on Thursday after the company reported fiscal fourth-quarter revenue of $90 billion, up 18% year-over-year and well ahead of the $87.6 billion Wall Street expected. The standout figure: Azure cloud revenue grew 43% in constant currency, accelerating from 40% the prior quarter, and crossed $100 billion in annual revenue for the first time in company history.
Diluted earnings per share came in at $4.81, up 32% from a year earlier, while Microsoft Cloud revenue overall reached $59.3 billion, up 27%. Capital expenditures landed at $41 billion including leases, below the $42 billion investors had feared, easing concerns that runaway AI infrastructure spending was outpacing returns. Commercial remaining performance obligations jumped 84% to $678 billion, and Microsoft disclosed more than 30 million paid Copilot seats.
The rally helped push the Nasdaq Composite to its best single session since mid-June, snapping a six-day losing streak, with Microsoft alone contributing roughly 1 percentage point to the index's 2.6% gain. Several analysts raised price targets following the report, including Citi to $600 and Wells Fargo to $650, as the results offered concrete evidence that heavy AI infrastructure spending is starting to convert into cloud revenue.