Microsoft Corp. (MSFT) reported fiscal third-quarter adjusted earnings per share of $3.42 on Wednesday after the close, well above the $3.18 Wall Street consensus, as the AI-infrastructure flywheel produced the strongest Azure quarter in nearly two years. Total revenue of $76.8 billion topped the $74.4 billion estimate, with Intelligent Cloud — the segment that houses Azure — generating $32.6 billion, up 28% year-on-year.
Azure and other cloud-services revenue grew 35% in constant currency, an acceleration from 31% in the December quarter and the fastest pace since fiscal Q4 2024. Chief financial officer Amy Hood said on the earnings call that AI services contributed approximately 17 percentage points to Azure growth, up from 13 points last quarter and 8 points a year ago. The non-AI Azure consumption business continued to grow in the high-teens.
Capex Surges Past $90 Billion Annual Pace
Capital expenditures hit $24.5 billion in the quarter, up 38% year-on-year and ahead of the $22.6 billion consensus. Hood guided fiscal Q4 capex to $26-$27 billion, implying a full-year run-rate of more than $90 billion versus the previously communicated "low-$80s billion." Approximately half of capex spending now goes to long-lived assets including land, buildings, and shell construction; the balance funds servers and networking.
CEO Satya Nadella said Microsoft has secured 4.6 gigawatts of new datacenter capacity in calendar 2026 across the U.S., U.K., Germany, Saudi Arabia and Australia. Co-Pilot for Microsoft 365 paid seats reached 18 million, up from 13 million last quarter, with 78% of the Fortune 500 now in active deployment. The Azure OpenAI Service hosts more than 80,000 customers, double the count from a year ago.
Stock Reaction and Read-Throughs
Microsoft shares jumped 8.1% in extended trade to $476.20, adding $260 billion of market capitalization. The print buoyed AI-supplier names: Nvidia (NVDA) climbed 4.2% after-hours, AMD