- Microsoft's cloud revenue soared, driven by its cloud computing segment and growing adoption of Copilot, leading to speculation about whether it is the right time to buy the stock.
- Azure revenue rose 43% year over year, marking the 12th consecutive quarter of growth exceeding 30%, and surpassed $100 billion for the fiscal year.
- Bookings increased by 10%, with remaining performance obligations (RPOs) surging 84% year over year to $678 billion, indicating strong future commitments.
- Total revenue for Microsoft rose 18% year over year to $90 billion, with adjusted earnings per share (EPS) increasing 23% to $4.74, surpassing analyst expectations.
- Intelligent cloud revenue, which includes Azure and GitHub, climbed by 32% year over year to $39.3 billion, aided by a new pricing model for GitHub Copilot.
Microsoft's cloud revenue soared 43% year-over-year, contributing to a total revenue of $90 billion and adjusted earnings per share (EPS) of $4.74. Despite these strong results, the stock is down over 10% year-to-date, raising questions among investors about the right timing for purchases.14
Azure, Microsoft's cloud unit, has been a significant growth driver, marking its 12th consecutive quarter of revenue growth exceeding 30%. The segment surpassed $100 billion for the fiscal year, with projections indicating a potential 45% growth in the upcoming quarter. Bookings rose 10%, and remaining performance obligations (RPOs) surged 84% year-over-year to $678 billion, with about 30% expected to be recognized as revenue in the next year.3
Despite the impressive cloud performance, Microsoft's stock remains attractively valued with a ratio below 23.5 based on fiscal 2027 estimates. Analysts project fiscal 2027 Q1 revenue between $89.85 billion and $90.95 billion, indicating a 16% growth at the midpoint, surpassing analyst expectations of $89.66 billion.
As the company continues to see strong Azure growth and increasing adoption of Copilot, investor sentiment is shifting, suggesting potential upside for Microsoft's stock in the coming years.
“Microsoft's total revenue rose 18% year over year to $90 billion, topping LSEG consensus of $87.62 billion, while Azure surpassed $100 billion for the fiscal year. Remaining performance obligations surged 84% to $678 billion, signaling future cloud demand as the stock remains down year-to-date.”
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