Microsoft Stock’s Best Quarter Since 1991: Azure Growth, $41B AI Capex and Copilot

The earnings behind the rebound are substantial. So is the infrastructure bill. Microsoft’s own disclosures also reveal an important correction to the spending figures circulating in market coverage: $35.8 billion was cash paid for property and equipment, not total quarterly capital expenditures.

A historic rally, with a recovery-sized caveat​

24/7 Wall St.’s report, republished by AOL, puts Microsoft’s September 30, 2026 closing price at $512.90, with a 6.73% year-to-date gain and a slightly negative one-year return. Those figures frame the rally primarily as a recovery, rather than an uninterrupted march to new highs.

There is also a calendar distinction worth keeping straight. The stock rally covered July through September. Microsoft’s fiscal fourth-quarter results, released on July 29, covered the period ended June 30, 2026. The earnings announcement therefore arrived during the market rebound, but measured an earlier operating period.

Azure and Copilot supplied the business momentum​

Microsoft’s fiscal Q4 release reported:

• Revenue: $90 billion, up 18% year over year.
• Operating income: $40.6 billion, up 18%.
• Azure and other cloud services growth: 43%.
• Intelligent Cloud revenue: $39.3 billion, up 32%.
• Microsoft 365 Copilot: More than 30 million paid seats.

Azure also exceeded $100 billion in annual revenue for the first time. These are concrete operating milestones, not merely enthusiasm attached to an AI label.

However, paid seats are not a measurement of daily usage or customer productivity. For enterprise buyers, the sensible takeaway is to evaluate their own adoption and outcomes rather than treat Microsoft’s sales milestone as proof that every deployment delivers value.

The earnings headline needs another qualification. Microsoft reported $4.74 in non-GAAP diluted earnings per share, but that measure excludes OpenAI investment effects—not every unusual item. A $3.2 billion Anthropic investment gain was among several discrete items that collectively benefited EPS by $0.27 relative to previous guidance.

The infrastructure bill is larger than $35.8 billion​

CFO Amy Hood reported $41 billion in total quarterly capital expenditures, including $5.6 billion in finance leases. Cash paid for property and equipment was separately reported at $35.8 billion. Operating cash flow reached $55.4 billion, while free cash flow was $19.6 billion.

That distinction matters: comparing spending across quarters requires consistent treatment of leases and cash purchases. Otherwise, the financial scoreboard changes while the underlying investment continues.

A huge backlog is not immediate revenue​

Microsoft’s commercial remaining performance obligation reached $678 billion, up 84%. Growth excluding OpenAI was 25%, and approximately 30% of the total was expected to become revenue within the following 12 months. The backlog represents contracted business still to be recognized—not cash already earned.

The contrast supports a balanced reading: demand extends beyond OpenAI, but OpenAI materially influences the headline growth rate.

Nor was strength universal. Windows OEM and Devices revenue fell 7%, while Xbox content and services revenue declined 10%. The cloud-led rally should not be mistaken for a simultaneous acceleration across Microsoft’s PC and gaming businesses.

What the next report needs to establish​

Microsoft guided to approximately 45% Azure growth in constant currency for fiscal Q1 2027, while warning that capacity timing and contract mix can move quarterly growth rates. That is an expectation, not a completed result.

AOL’s report names November 4, 2026 as an expected earnings date. Microsoft’s investor-relations FAQ does not confirm it, saying instead that fiscal Q1 results will be announced soon.

The useful test is therefore broader than whether MSFT clears a particular share-price level: can Microsoft sustain cloud growth while converting its infrastructure investment into durable cash generation? A historic rebound earns attention. The next operating results must earn the confidence behind it.

Update: Additional details (October 1, 2026)​

24/7 Wall St. reports that Piper Sandler raised its Microsoft price target to $610 from $550. Analyst Billy Fitzsimmons estimated that every 10% of customers moving from Microsoft 365 E5 to the newer E7 tier could add roughly $2 billion in annual revenue.

The outlet also says Microsoft told investors that hundreds of enterprise customers had purchased millions of E7 seats within two months of launch. Oppenheimer reportedly raised its target to $570 from $515 following Microsoft’s late-September Copilot update.