Microsoft’s AI economics shift as Azure grows 43% in fiscal Q4 2026

Microsoft’s cloud business accelerated in the quarter ended June 30, 2026. Azure and other cloud services grew 43% year over year, up from 40% the quarter before. Microsoft reported the results on July 29, 2026. The numbers behind the acceleration Full-year Azure revenue topped $100 billion for the first time, up 41% year over year. Total company revenue for the fourth quarter reached $90 billion, an 18% increase. Microsoft Cloud, the broader bucket that includes Azure and commercial cloud products, brought in $59.3 billion, up 27%. GAAP net income came in at $35.8 billion, a 31% jump from the prior year. The spending side of the ledger Capital expenditures in the fourth quarter hit approximately $41 billion. For the full fiscal year, additions to property and equipment reached $115.9 billion, up 80% year over year. Microsoft added 31 data centers during the fourth quarter alone and 88 across fiscal 2026. Microsoft Cloud gross margin fell to 65% in the fourth quarter, down from 68% in the prior quarter, as the company poured money into AI infrastructure. Demand that hasn’t shown up on the income statement yet Commercial remaining performance obligations rose to $678 billion, up 84%...