Microsoft (MSFT) Cloud Revenue Up 40%, Plans $400 Billion Capital Expenditure

In its fiscal third quarter of 2026, Microsoft (MSFT) reported a 40% year-over-year growth in Azure and other cloud services revenue. Total cloud revenue for Microsoft reached $54.5 billion, an increase of 29%, with its AI business surpassing a $37 billion annual run rate, up 123%. Microsoft expects to spend approximately $190 billion on capital expenditures this year, a 61% increase. The company’s operating margin improved to 46.3%, along with a return of $10.2 billion through dividends and buybacks. These figures reflect strong growth, but also highlight the significant investment required to maintain its competitive edge in AI and cloud services.