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That wraps up our initial coverage of Microsoft’s Q4 results. Thank you for stopping by!
Microsoft’s commercial remaining performance obligation soared 84% year over year to $678 billion, giving the company extraordinary visibility into future cloud and software revenue.
The backlog is now more than twice Microsoft’s $331.84 billion in fiscal 2026 revenue. It reflects the value of contracts already signed but not yet recognized as revenue, including long-term Azure and Microsoft 365 commitments.
Microsoft 365 Copilot also surpassed 30 million paid seats. Together, the backlog and Copilot adoption suggest enterprise AI demand is moving beyond experimentation and into large-scale commercial deployments.
Microsoft spent $35.80 billion on property and equipment during fiscal Q4, more than double the $17.08 billion spent one year earlier. Full-year capital expenditures reached $115.95 billion, up nearly 80% from $64.55 billion in fiscal 2025.
The company still generated $55.44 billion in quarterly operating cash flow, up 30% year over year. However, subtracting property and equipment additions leaves $19.64 billion, down from roughly $25.57 billion last year.
That cash-flow pressure remains the central risk, but Azure’s 43% growth gives investors early evidence that Microsoft’s massive AI infrastructure buildout is generating a meaningful return.
Microsoft’s AI and cloud investments are translating into accelerating growth. Azure and other cloud services revenue increased 43% year over year during fiscal Q4, helping Intelligent Cloud revenue climb 32% to $39.31 billion.
CEO Satya Nadella revealed that Azure revenue surpassed $100 billion for the full fiscal year for the first time. Microsoft Cloud revenue reached $59.3 billion during Q4, up 27% year over year.
The results directly address concerns about Microsoft’s enormous AI spending. Azure growth exceeded the 39.6% analysts expected, helping send Microsoft shares up roughly 2% after the report.
Microsoft just reported fiscal Q4 earnings, with shares initially up 4% following the release. Here are the key numbers:
Quick Read:
Microsoft delivered a broad beat, led by Azure and other cloud revenue growth of 43% in constant currency, well ahead of the 39.6% expected.
Intelligent Cloud revenue also reached $39.31 billion versus $38.17 billion expected, giving investors early evidence that Microsoft’s enormous AI spending is translating into stronger cloud growth.
Microsoft (NASDAQ:MSFT) beat EPS in all five recent quarters yet still averaged a -1.05% move after earnings. Tonight’s stock reaction will hinge on forward guidance.
Management typically guides Azure conservatively at constant currency, then beats. Last quarter, CFO Amy Hood guided Q4 Azure growth of 39% to 40%, with capacity constrained through 2026 and calendar 2026 capex framed at roughly $190 billion.
Bullish signals: FY27 Azure guide at or above 40%, capex flat-to-modestly higher, AI run rate accelerating past $37 billion, and easing capacity commentary.
Bearish signals: Azure decelerating toward mid-30s, capex sharply higher without matching RPO growth beyond $627 billion, or margin caution.
Microsoft trades at $395.36 intraday, hugging its 50-day moving average of $398.54 but sitting well below the 200-day at $434.79. The stock has climbed 5.46% over the past month, yet remains 18.3% lower year-to-date.
Immediate support sits near the 52-week low of $349.20, with the $390.34 weekly floor acting as a nearer shelf. Resistance clusters at the 200-day, then the 52-week high of $551.05.
Options positioning skews bullish: the July 31 expiry shows 82,709 call contracts against 46,594 puts, a 1.78x volume ratio, with call open interest running 2.54x puts. Aug 21 holds the heaviest call OI at 595,302 contracts, signaling institutional bets on a sustained post-earnings move.
Last year, Microsoft delivered EPS of $3.65 on revenue of $76.44B. Prediction markets place 63% odds cloud revenue clears $58B and 61.5% odds capex tops $44B.
Key KPIs: Azure constant-currency growth (guided 39%-40%), the $37B AI run rate, $627B RPO, and any FY27 capex color against Amy Hood’s $190B calendar 2026 framework.
Microsoft (NASDAQ:MSFT) shares trade at $400.91, up 1.92% today. Full-chain put/call sits at 0.52. In Q2 FY26, MSFT dropped -9.99% on a beat, which serves as a warning that a beat alone might not send the stock higher. A miss on Azure or a capex step-up without accelerating RPO could trigger an outsized move.
This live blog is being updated by Thomas Richmond, a 24/7 Wall St. contributor. You’ll get expert analysis of Microsoft’s earnings.
Simply stay on this page, and new updates will appear below automatically. We expect Microsoft to release earnings shortly after 4:10 p.m. ET.
Microsoft reports fiscal Q4 2026 results after the bell, with Polymarket assigning a 94.5% probability of an earnings beat. Azure growth and the company’s $37 billion AI revenue run rate will anchor the report, but capex discipline may determine the market’s reaction.
Shares have fallen 22.63% over the past year, leaving Microsoft at a forward P/E of about 21.3x. Investors now want evidence that enormous infrastructure investments can translate into stronger cloud growth and free cash flow.
Polymarket currently assigns a 50.5% probability that the combined valuation of Anthropic and OpenAI will exceed Microsoft’s market value by the end of the year. Microsoft currently has a $2.9 trillion market cap, which would make this a tough hurdle to exceed.
A clean quarter with accelerating Azure growth and disciplined capex could reset the AI return narrative.
Live coverage has ended. The full story is below.
Microsoft (NASDAQ:MSFT | MSFT Price Prediction) reports fiscal Q4 2026 results today around 4:10 PM ET. Shares trade today at $395.98, down 18.3% year to date, setting tonight as a credibility test for the hyperscaler’s overall AI capex thesis.
Last quarter, Microsoft delivered $82.89 billion in revenue, up 18.3%, with Intelligent Cloud growing 30% and Azure accelerating 40%.
Commercial RPO jumped to $627 billion, nearly doubling year over year and reinforcing multi-year demand visibility. Yet capex surged 84.39% to $30.88 billion, narrowing the gap between infrastructure spending and reported cash flow. Reddit engagement spiked bearish on July 22-23 around Mag 7 concentration and hyperscaler capex rationality, then partially recovered into the report.
| Metric | Q4 FY26 Setup | Prior Quarter |
|---|---|---|
| Azure Growth (cc) | 38%-44% (66.6% odds) | 39% cc |
| Microsoft Cloud Revenue | Above $58B (95.5%) | $54.5B |
| Capex | Above $50B (56%) | $30.88B |
| Beat Probability | 94.5% | Beat by 4.4% |
Crowd probabilities imply Azure holds a 38%+ growth cadence and cloud revenue clears $58 billion. The capex distribution signals traders bracing for a step-up above the last print.
Tonight, I’ll be watching whether Azure constant-currency growth holds above 40% or decelerates toward the 38%-40% band that traders assign a 34% probability to.
Investors will also focus on the AI run-rate progression beyond $37 billion and on CEO Nadella’s framing of OpenAI’s $250 billion Azure commitment. Commercial RPO conversion tempo matters more than the headline surprise.
I’ll also be listening for capex guidance. Prediction markets give 61.5% odds that quarterly capex will exceed $44 billion, so any figure below that could ease pressure on the free cash flow debate.
Operating margin discipline is another lever. Q3 delivered 45.62% operating margins alongside soaring infrastructure spend, and holding that line while depreciation ramps will define credibility.
| Quarter | EPS Surprise | Day-Of Move | 1-Week Move | 30-Day Move |
|---|---|---|---|---|
| Q3 FY26 | +4.4% | -3.93% | +3.19% | +8.22% |
| Q2 FY26 | +5.61% | -9.99% | -9.19% | -6.82% |
| Q1 FY26 | +12.84% | -2.92% | -5.45% | -6.80% |
| Q4 FY25 | +8.01% | +3.95% | -2.37% | -5.32% |
On average, shares moved -2.16% one week after earnings over the past year.
Contact [email protected] for any questions or corrections.
Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.
His work has also been featured on platforms including Seeking Alpha and Sure Dividend.
Outside of work, Thomas enjoys weight lifting and soccer.
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