Gotrade News - Microsoft reported third fiscal quarter results that beat market expectations on Wednesday (29/04) in the United States. Azure growth of 40%, a Copilot base topping 20 million users, and the OpenAI restructuring drew global investor focus.
Shares of MSFT reacted positively after June quarter guidance landed above the latest Wall Street consensus. The positive sentiment reinforces Microsoft's role as leader in the global AI spending cycle.
Key Takeaways:
- Azure grew 40% with next quarter guidance at 39-40%, signaling cloud AI demand remains strong and accelerating.
- Copilot reached 20 million paid users, boosting the enterprise productivity segment and annualized subscription run rate.
- The OpenAI restructuring locks in 20% of revenue through 2030, while removing Microsoft's exclusive cloud reseller status.
According to Investing.com, Azure revenue grew 40% in the quarter ended March 2026 across all global regions. The figure matched Wall Street consensus and marked a slight acceleration from 39% the prior quarter.
Management guided Azure growth in the June quarter to 39 to 40% in constant currency terms. The guidance topped analyst expectations near 36.7% and signaled corporate demand momentum stays intact.
Total quarterly revenue reached 82.9 billion dollars, up 18% from the same period last year. Net income jumped 23% to 31.8 billion dollars, helped by stable cloud segment margins this quarter.
The Intelligent Cloud segment that houses Azure grew 30% year on year to 34.7 billion dollars. Remaining performance obligation, the contracted backlog, swelled 99% to 627 billion dollars on long term commitments.
AI Capital Spending Hits Record
Quarterly capital expenditure reached 31.9 billion dollars, jumping 49% year on year. Management projects total calendar 2026 capex at 190 billion dollars, well above consensus near 150 billion.
CFO Amy Hood reaffirmed confidence in the return on investment as customer demand signals stay elevated. About 25 billion dollars of capex is allocated to absorb chip price hikes from key suppliers like NVDA.
Microsoft's AI business run rate now sits at 37 billion dollars, up 123% year on year. Monetization is starting to chase infrastructure spending, though the investment to revenue gap remains quite wide.
Microsoft shares had corrected nearly 25% earlier in 2026 amid investor concerns over aggressive capex plans. Partial recovery followed this report as AI revenue accelerated faster than most bottom up analyst projections.
Copilot and the Reshaped OpenAI Partnership
According to TechBuzz, Microsoft 365 Copilot paid users surpassed 20 million by end of April 2026. The figure climbed sharply from 15 million in January, reflecting expansive enterprise adoption across segments.
Subscription pricing of 30 dollars per user each month implies an annualized run rate near 7.2 billion dollars. Microsoft emphasized user engagement is also climbing, although formal retention metrics have not been disclosed.
On Monday (27/04), Microsoft and OpenAI revised the structure of their strategic partnership originally signed in late 2023. Microsoft retained rights to 20% of OpenAI revenue through 2030, but lost exclusive Azure reseller status.
OpenAI is now free to collaborate with direct rivals like AMZN and GOOGL for model distribution. Microsoft also added Anthropic's Claude to the Azure catalog as a step toward supplier diversification.
For investors, aggressive Azure guidance and the 37 billion dollar AI run rate suggest monetization has not peaked. The main risk remains capex cycle duration and AI margin elasticity over the medium to long term.
