Microsoft Azure Revenue Surpasses $100 Billion Amid AI Spending

Microsoft increased its capital expenditures to $116 billion in fiscal 2026, up from $65 billion the previous year, to fund massive investments in AI and cloud computing. While these costs create an unpredictable near-term outlook, the company's Azure revenue surpassed $100 billion annually for the first time, growing by 43% in the fourth fiscal quarter.

Overall revenue grew by 17%, though this rate trails behind competitors Amazon and Alphabet. Microsoft Cloud revenue increased by 27% year-over-year during fiscal 2026. Despite these gains, the company's share price is on track to lag the S&P 500 for a third consecutive year.

Since Satya Nadella became CEO in February 2014, the company's stock has grown approximately 15-fold with a 27% annual growth rate. Microsoft now faces an environment of aggressive spending from rivals, with Amazon on track to spend $220 billion and Alphabet planning approximately $200 billion in capital expenditures in 2026.