Microsoft shares jumped about 6 percent in after-hours trading Wednesday after the company reported quarterly revenue ahead of expectations and disclosed the dollar value of its Azure cloud business for the first time. Alphabet, which also reported Wednesday, fell 10.4 percent despite much faster cloud growth.
What happened
Microsoft said Azure revenue reached $33.2 billion in the quarter ended September 30, an increase of 48 percent from a year earlier. Analysts tracked by Visible Alpha expected about $32.84 billion. Total revenue rose 19 percent to $92.3 billion, ahead of the 17 percent growth analysts anticipated.
The report marked the first time Microsoft published Azure revenue in dollars rather than only a growth percentage. The change lets investors compare Azure directly with Amazon Web Services and Google Cloud, which both report dollar figures every quarter.
Key numbers from Microsoft’s quarter
| Item | Result |
|---|---|
| Azure revenue | $33.2 billion, up 48 percent |
| Azure consensus estimate | $32.84 billion (Visible Alpha) |
| Prior quarter Azure revenue | $29.4 billion |
| Total revenue | $92.3 billion, up 19 percent |
| Agents and Infra segment | $76.8 billion, up 25 percent |
| After-hours move | Shares up about 6 percent |
Microsoft also introduced two new reporting segments this quarter. The segment that groups Azure with the Microsoft 365 cloud business, called Agents and Infra, produced $76.8 billion in revenue, up 25 percent from a year earlier.
Microsoft’s impact on investors
The stock has been a standout in 2026. Shares climbed roughly 35 percent since the July 29 earnings report, which featured the fastest cloud growth in four years and Microsoft’s best single-day gain since 2008. Before Wednesday’s release the stock was up about 9 percent for the year.
Spending remains the question hanging over the group. Microsoft has forecast capital expenditures of about $190 billion for 2026, and the largest technology companies together are expected to pour more than $700 billion into data centers and related infrastructure this year.
Alphabet grows fast but misses on profit
Alphabet’s report landed differently. Revenue rose 25 percent to $127.6 billion, the company’s 13th consecutive quarter of double-digit growth, and Google Cloud revenue more than doubled, rising 103 percent to $30.7 billion.
Earnings per share of $2.12 fell well short of the $3.02 analysts expected. Net income dropped to $26.2 billion from $35.0 billion a year earlier, reflecting an $8.2 billion swing in other income and expense. Shares slid 10.4 percent after hours to $288.35.
Chief Financial Officer Anat Ashkenazi pointed to the broader picture. “We had a strong third quarter, delivering our 13th consecutive quarter of double-digit revenue growth,” she said. She added that Alphabet is positioned to monetize its artificial intelligence investments across products that reach billions of users.
Where the cloud race stands
| Company | Cloud unit | Quarterly revenue | Year-over-year growth |
|---|---|---|---|
| Microsoft | Azure | $33.2 billion | 48 percent |
| Alphabet | Google Cloud | $30.7 billion | 103 percent |
| Amazon | AWS | Reports Thursday evening | To be determined |
Amazon reports its own results Thursday evening, which will complete the three-way comparison for the first time with all three cloud businesses measured in dollars.
What investors should watch
Watch cloud margins as the companies rent third-party computing capacity to meet demand. Alphabet’s management said near-term margin pressure should continue as it uses outside compute to serve customers.
Watch also how the market treats the gap between revenue growth and profit. Wednesday’s twin reports show that investors now punish heavy spending that fails to reach the bottom line.
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