azure

Yorkville Ives analysts pointed out that Microsoft's financial report shows its cloud computing capacity is sufficient to meet the enormous market demand. Microsoft Azure's revenue exceeded Wall Street expectations, becoming a key factor in stock performance.Before the financial report, the market had already seen AI-driven demand, but there were doubts about the speed of capacity release. Microsoft's promised future expenditure scale is $677 billion, with confirmed revenue expected to increase in the next 12 months. On Thursday before the market opened, Microsoft's stock price rose 2.7% against the trend.

Microsoft expects its Azure cloud business revenue to grow by 49% to 50% in the second fiscal quarter, with total revenue reaching between 96 billion and 97.1 billion dollars.Revenue from the Intelligent Cloud and Infrastructure segment is expected to be between 80.1 billion and 80.7 billion dollars, while revenue from the Devices and Consumer segment is projected to be between 15.9 billion and 16.4 billion dollars. Microsoft also anticipates that capital expenditures in the second fiscal quarter will exceed 50 billion dollars.

Microsoft announced that its quarterly cloud business revenue exceeded expectations, with Azure cloud computing revenue growing by 48% to reach $33.17 billion, surpassing the market expectation of $32.84 billion. The company's free cash flow was $18.6 billion, far exceeding the market expectation of $8.54 billion. Microsoft’s stock rose nearly 6% in after-hours trading.

According to Zhitong Finance, JPMorgan analyst Samik Chatterjee maintains a "Buy" rating on Microsoft with a target price of $625. The research report states that investors will closely monitor the business growth of Azure, the commercial version of Microsoft 365 Cloud, and Copilot.Chatterjee indicated that compared to the quarterly earnings report itself, the stock price reaction may be more determined by performance outlook, as investors hope to see sustainable signals of growth in cloud business and artificial intelligence.Yorkville Ives analyst Dan Ives maintained a "Outperform" rating on Microsoft with a target price of $615 on Friday, and listed Microsoft as one of his "Top 5 Tech Picks Before 2027." Ives stated that the concentrated earnings reports from large cloud providers like Microsoft, Alphabet, and Amazon are expected to soothe the highly volatile market.

Microsoft announced that it will begin disclosing quarterly sales figures for its Azure cloud business, changing the company's long-standing practice of only reporting Azure revenue growth without disclosing specific income. Microsoft stated that considering the scale and importance of Azure, now is the right time to increase transparency. This adjustment marks the first major reform of the primary financial reporting structure since 2015.Microsoft has merged its existing Intelligent Cloud business and Productivity and Business Processes business into a "Agent and Infrastructure" department; more personal computing business has been adjusted to the "Devices and Consumer" department. Microsoft stated that artificial intelligence is changing the way the company builds products and operates, blurring the lines between products and reshaping business models.The company previously disclosed that Azure's sales for the fiscal year ending in June exceeded $100 billion, up from $75 billion in the previous fiscal year, accounting for about 30% of Microsoft's total revenue. This new reporting structure will officially take effect when Microsoft releases its first-quarter financial report for fiscal year 2027.

Market news reports that Meta Platforms is investing hundreds of millions of dollars into Microsoft's Azure AI services.

Microsoft released its Q4 fiscal year 2026 financial report, with revenue of $90 billion, a year-on-year increase of 18%, exceeding market expectations of $87.7 billion; adjusted earnings per share of $4.74, a year-on-year increase of 23%, which is 11.5% higher than expected; operating profit of $40.6 billion, a year-on-year increase of 18%. Intelligent cloud revenue was $39.3 billion, a year-on-year increase of 32%, with Azure and other cloud services revenue growing by 43%, significantly higher than the market expectation of 39.6%. Total revenue from Microsoft Cloud was $59.3 billion, a year-on-year increase of 27%. CEO Satya Nadella disclosed that Azure's annual revenue has surpassed $100 billion for the first time, and paid users of Microsoft 365 Copilot exceeded 30 million.In terms of capital expenditure, the fourth quarter's property and equipment acquisition expenditure was $35.8 billion, a year-on-year increase of approximately 110%; total capital expenditure including finance leases was $41 billion, a year-on-year increase of 70%, but lower than the market expectation of $42.5 billion. The remaining performance obligations (RPO) for cloud business surged 84% year-on-year to $678 billion, about twice the annual revenue. Microsoft disclosed in a regulatory filing that new unexecuted data center lease commitments in the fourth quarter exceeded $130 billion, with the total unexecuted lease commitments increasing by 67.4% quarter-on-quarter to $329.1 billion. Annual revenue was $331.8 billion, a year-on-year increase of 18%; net profit was $133.7 billion, a year-on-year increase of 31% (GAAP).

According to Jinshi reports, Microsoft's fourth fiscal quarter revenue growth for AZURE and other cloud services, excluding the impact of exchange rates, increased by 43%, exceeding market expectations.

Deutsche Bank stated in its latest research report that the market's concerns about Microsoft's surge in capital expenditure, AI investment returns, and the concentration of Open AI orders have been significantly overstated. The current valuation is attractive, maintaining a "Buy" rating and a target price of $550. Deutsche Bank expects Microsoft's fourth fiscal quarter (corresponding to the second quarter of the calendar year) revenue to be $87.4 billion, a year-on-year increase of 14.3%; non-GAAP earnings per share are expected to be $4.17. The growth rate of Azure, calculated at constant exchange rates, is expected to reach 40% to 41%, with enterprise cloud migration, AI computing demand, and new data center capacity continuing to support growth. Microsoft 365 commercial cloud revenue is expected to grow by 15% to 16%, and paid seats for Copilot may exceed 25 million by the end of the year.

According to Jinshi reports, NVIDIA announced that Anthropic's Claude series models are now available on Microsoft's Azure NVIDIA GB300 Blackwell Ultra platform.

ChainCatcher news, according to Caixin, multiple developers received emails from Microsoft stating that due to local regulatory requirements, the Microsoft Azure OpenAI service will be shut down on October 21, and in the future, only enterprise customers in mainland China will be able to subscribe to Azure's OpenAI services.Most developers received the email on the morning of the 17th. One developer stated, "This was the only window for personal identity to use OpenAI compliantly in the country, and now it is closed." Meanwhile, some developers expressed dissatisfaction with Microsoft for "only giving four days to handle this." As for this matter, Microsoft has not yet made a statement.