Microsoft beats on Q1 top and bottom lines on cloud strength

Microsoft (MSFT) reported its fiscal first quarter earnings after the bell on Wednesday, beating on the top and bottom lines on the strength of its cloud business. Microsoft stock was up about 2% in after-hours trading following the release.

Microsoft is one of the biggest beneficiaries of the AI boom, thanks to the billions it has invested in its cloud infrastructure and ChatGPT developer OpenAI. But it’s also facing headwinds, including increasing competition from the likes of Amazon (AMZN), Google parent Alphabet (GOOG, GOOGL), and Salesforce (CRM), which have developed or are developing their own OpenAI rivals.

“AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process,” Microsoft CEO Satya Nadella said in a statement.

“We are expanding our opportunity and winning new customers as we help them apply our AI platforms and tools to drive new growth and operating leverage.”

For the quarter, Microsoft saw earnings per share (EPS) of $3.30 on revenue of $65.6 billion. Analysts were expecting EPS of $3.10 and revenue of $64.5 billion, based on analyst consensus estimates compiled by Bloomberg. The company reported EPS of $2.99 on revenue of $56.5 billion during the same quarter last year.

Microsoft’s commercial cloud revenue, which includes cloud services sales, came in at $38.9 billion versus expectations of $38.1 billion. The company’s Intelligent Cloud segment, which includes its Azure business, brought in $24.1 billion in the quarter, up 20% year over year. Microsoft said it saw 12 points of growth from AI services in Azure.

Microsoft also reported Productivity and Business Processes segment revenue of $28.3 billion, a 12% year-over-year increase. The segment includes sales of Microsoft’s Microsoft 365 services.

The company also reported growth in its More Personal Computing business, with revenue climbing 17% to 13.2 billion.

The PC market is in the early innings of a recovery after sales collapsed following the enormous growth around the onset of the pandemic. Microsoft, along with its manufacturing partners, is also pushing a new class of computers known as Copilot+ PCs.

Copilot+ PCs, or laptops with the power to perform on-device AI processes, are the PC industry’s attempt to capitalize on the AI hype story.

Microsoft stock is up some 28% over the last 12 months. And while that’s certainly nothing to shrug off, it’s lower than the broader S&P 500 (^GSPC), which is up 41%. Google parent Alphabet’s stock is up 42%, while Amazon shares are up 49% during the same period.

Sign up for Yahoo Finance's Week in Tech newsletter.

Sign up for Yahoo Finance’s Week in Tech newsletter. (yahoofinance)

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here

Read the latest financial and business news from Yahoo Finance.



Source link

Visited 4 times, 1 visit(s) today

Related Article

Strong Earnings Not Enough to Power Stocks Past AI, Credit Worry

(Bloomberg) — Corporate America just delivered one of the strongest earnings seasons in recent memory, but you wouldn’t know it looking at the stock market. Companies in the S&P 500 grew earnings by 13% in the fourth quarter, almost six percentage points better than expected. They also served up optimism about the coming year. The

Is Taiwan Semiconductor Stock a Buy Now?

Despite an exceptionally strong 2025 performance, Taiwan Semiconductor still has plenty of room to run this year and beyond. Taiwan Semiconductor (TSM +4.24%) is a core player in the global AI boom. It’s also the world’s largest dedicated chip manufacturer, with approximately 70% market share. The semiconductor foundry has benefited immensely from AI-related demand and

Hong Kong Stock Market Midday Review

According to Zhitong Finance, the Hang Seng Index rose by 2.29%, gaining 604 points to close at 27,017 points; the Hang Seng Tech Index increased by 3.32. The morning trading volume of Hong Kong stocks reached HKD 106.5 billion. Optical communication concept stocks are among the top gainers. Key enterprises in Optics Valley will continue

Insurance stocks collectively surged, with investment returns on the asset side expected to drive improvements in insurers’ profitability.

Insurance stocks collectively rose, as of press time,$AIA (01299.HK)$up over 4%,$PICC GROUP (01339.HK)$surging over 3%,$PING AN (02318.HK)$、$CHINA LIFE (02628.HK)$、$NCI (01336.HK)$with gains exceeding 2%. In terms of news, the National Financial Regulatory Administration previously released annual operating data for the insurance industry. The data showed that in 2025, the insurance industry achieved approximately RMB 6.12 trillion

Hong Kong Stocks Open | Hang Seng Index Up 0.58% at Opening, Semiconductor Sector Strong, Huahong Semiconductor (01347) Rises Nearly 2%

The Hang Seng Index opened 0.58% higher, while the Hang Seng Tech Index rose 0.86%. In the market, the semiconductor sector performed strongly, with Huahong Semiconductor and SMIC rising nearly 2%; AI application stocks weakened. Regarding the future outlook for Hong Kong stocks Galaxy Securities stated that the Hong Kong-listed technology sector remains a long-term

Midday Review of Hong Kong Stocks

According to Futu News on February 25, the three major indexes of Hong Kong stocks rose collectively, with the Hang Seng Index up by 0.75%, the Technology Index up by 0.34%, and the China Enterprises Index up by 0.90%. By midday close, 1,244 Hong Kong stocks had risen, 781 had fallen, and 1,138 remained unchanged.

Morgan Stanley resets Nvidia stock forecast ahead of earnings

Investors are eagerly waiting for Nvidia‘s (NVDA) Q4 earnings, scheduled for February 25. The last earnings report was an absolute smasher, yet the stock market reacted negatively. The stock closed at $186.52 on the day of earnings and closed at $180.64 on the next day. I covered analysts’ reactions to those earnings in my article

3 Breakout Growth Stocks You Can Buy and Hold for the Next Decade

Micron and Broadcom are well-known breakout stocks, but Nokia is also poised to grow as it pivots into AI. The tech sector is getting repriced as investors figure out how AI will disrupt entire industries for the next several years. The picking of winners and losers has begun, and a few companies will stand the

Nvidia Stock Is Outperforming the Market in 2026. Is It a Buy?

Nvidia’s business results have been extraordinary, but are they impressive enough to make the stock a buy after a big run-up last year? Shares of artificial intelligence (AI) chip leader Nvidia (NVDA +0.79%) have held up well in early 2026, edging ahead of the broader market even as several other megacap tech companies have seen

Mirror mirror on the wall, what is the most shorted stock of them all?

Stay informed with free updates Simply sign up to the Equities myFT Digest — delivered directly to your inbox. Short selling is enjoying a bit of a comeback of late, despite markets surging over the past few years and inflicting several painful squeezes along the way. The median short interest in S&P 500 stocks has

Stock Market Today, Feb. 23: Novo Nordisk Plunges 16% After Obesity Drug Falls Short

Today, Feb. 23, 2026, a pivotal obesity‑drug trial setback forces investors to rethink Novo Nordisk’s strategy. Today’s Change (-16.43%) $-7.79 Current Price $39.63 Key Data Points Market Cap $134B Day’s Range $39.34 – $41.09 52wk Range $39.34 – $93.80 Volume 99M Avg Vol 23M Gross Margin 80.90% Dividend Yield 4.36% Novo Nordisk (NVO 16.43%), a

Why Morgan Stanley Stock Dropped on Monday

Lenders begin to worry about how AI agents could undermine their borrowers. Stock markets got rocked Monday, with the Dow down 1.3% amid concerns over a new report from Citrini Research, laying out economic risks from AI agents. Financial giant Morgan Stanley (MS 4.86%) stock is down 4.3% as of 1:30 p.m. ET. Image source:

Stocks Could Be Poised to Rally, According to This Contrarian Consumer Gauge

The S&P 500 could be set to break out of its anemic trading range, according to a veteran Wall Street strategist. The key metric to watch isn’t some piece of technical analysis or a big earnings update. Rather, it’s the growing feeling of economic unease among high-earning Americans, according to Jim Paulsen. The S&P 500

Stock Market Today, Feb. 23: Nio Jumps on Record Lunar New Year Battery Swaps

Today, Feb. 23, 2026, investors weigh Nio’s record Lunar New Year battery swaps against fresh institutional selling and looming resistance. Today’s Change (4.34%) $0.22 Current Price $5.29 Key Data Points Market Cap $11B Day’s Range $5.19 – $5.40 52wk Range $3.02 – $8.02 Volume 52M Avg Vol 45M Gross Margin 11.25% Nio (NIO +4.34%), designs

0
Would love your thoughts, please comment.x
()
x