Microsoft shares remain stable following strong quarterly results and Azure forecast

Microsoft released its fiscal 2026 third-quarter results on Wednesday, revealing figures that surpassed market expectations and a robust outlook for its Azure cloud division.

In the three months ending in March, revenue climbed 18% year-on-year to $82.89 billion, exceeding the LSEG consensus of $81.39 billion.

Earnings per share reached $4.27, representing a 23.4% increase. Despite these impressive statistics, the market reaction remained muted during extended trading as investors continued to debate the long-term viability of traditional software business models.

Azure cloud revenue grew by 40% on a reported basis, while constant currency growth hit 39%. During the earnings call, Chief Financial Officer Amy Hood indicated that the company expects to spend approximately $190 billion in capital expenditure throughout calendar 2026.

This significant investment aims to expand AI capacity and reduce reliance on third-party intellectual property.

Meanwhile, Chief Executive Satya Nadella addressed concerns regarding "AI eating software" by advocating for a hybrid consumption model. The firm also confirmed that paid Copilot seats have now surpassed 20 million users.

While Microsoft navigates these structural transitions, the stock has faced pressure, recently becoming the softest performer among the "Magnificent Seven" group over six months.

Looking ahead, the company provided fourth-quarter revenue guidance between $86.7 billion and $87.8 billion. This financial update arrives as the tech leader seeks to maintain its competitive edge in generative AI while balancing the evolving needs of its global enterprise customer base and upcoming research projects.