- Microsoft shares rose 37.5% between July and September, adding $1 trillion in market capitalization in the strongest quarterly showing since 1998.
- Azure revenue surpassed $100bn for the first time this year, with Azure and other cloud services revenue climbing 43%, and Microsoft 365 Copilot reached over 30 million paid seats.
- Fiscal Q4 2026 commercial remaining performance obligation grew 84% year-over-year, largely due to OpenAI, but sequential RPO growth came entirely from customers outside frontier model companies.
- Fiscal Q1 2027 earnings will test whether Azure growth meets the guided 44%-45% in constant currency after $115.95 billion in fiscal 2026 capital expenditures.
- Analysts estimate Q1 revenue at $90.59 billion and EPS at $4.71, with 69 of 72 analysts maintaining buy ratings.
- Microsoft is developing in-house chips like Maia 200 and models to reduce GPU costs and address a forecasted gross margin decline from 67.94% to about 61% by fiscal 2031.
Quotes
“surpassed US$100bn for the first time”
“shows a route to profitability from AI”
“clearly turned the corner”