Microsoft cloud revenue rises as quarterly AI spending hits $41bn

In short: Microsoft said its cloud business grew quickly in the latest quarter, while it also spent $41bn as it builds more capacity for AI.

What happened

Microsoft reported $90bn in sales for the three months ending in June, up 18% from a year earlier. That was higher than the $87.7bn analysts expected, according to the Financial Times.

The company said its “intelligent cloud” segment, which includes its Azure cloud platform, grew 32% to $39.3bn in revenue. Cloud services are like renting computing power and storage over the internet instead of running your own servers in an office.

Microsoft did not give a dollar figure for Azure revenue alone, but said Azure grew 43% year over year. The company linked that growth to higher demand for AI, which pushed customers to use more of its cloud services.

Microsoft also said net income, which is profit after costs, rose 31% to $35.8bn. It said this number was boosted by a gain related to its stake in Anthropic, an AI research company.

On spending, Microsoft said its capital expenditure, meaning money used to build long-term assets like data centers (large buildings full of computers), was $41bn for the quarter. That was up 70% from a year earlier, and it comes as the company has told investors to expect $190bn in capital spending in 2026.

Why it matters

Many popular AI features depend on large amounts of computing power, and that power often comes from cloud data centers. Microsoft’s results suggest demand is still rising, but the company is also spending heavily to keep up, which is one reason some investors have been cautious.

Source: Financial Times