Microsoft NASDAQ:MSFT, a global software and cloud-computing company, surged approximately 14.8% in Thursday's regular-session trading after reporting stronger-than-expected Azure growth and guidance. Azure revenue increased 43%, exceeding analysts' 39.98% estimate. Microsoft forecast fiscal first-quarter sales of approximately $90.4 billion at the midpoint, compared with the $89.66 billion consensus, while projected constant-currency Azure growth of 45% surpassed the 40.92% analyst estimate.
Microsoft generated $19.6 billion in quarterly free cash flow, above the $13.44 billion expected by analysts but 23% below the year-earlier period. Capital spending increased 70% to $41 billion during the April-to-June quarter, slightly below the $42.37 billion consensus. The company expects approximately $175 billion in reported capital expenditure during calendar 2026, below an earlier estimate of $190 billion, after changing the accounting life of certain data-center leases from 15 years to 25 years without altering its underlying expansion plans.
Microsoft disclosed $329.1 billion of data-center leases that have not yet commenced and are scheduled to begin between fiscal 2027 and 2033. That commitment illustrates the scale of infrastructure Microsoft is assembling to support cloud services and artificial-intelligence workloads. Chief Executive Satya Nadella said Microsoft's internally developed models and chips could produce efficiency improvements of as much as 40%. Investors may now assess whether accelerating Azure revenue and those efficiency gains can generate returns supporting the company's continuing infrastructure commitments.