Microsoft Earnings 2025: Cloud and AI Drive Record Revenue and Market Cap

Microsoft’s Blockbuster Fiscal Fourth Quarter 2025 Results

Microsoft reported stellar fiscal fourth quarter results ending June 30, 2025, with revenue soaring 18% year-over-year to $76.4 billion, the fastest growth in over three years. Net income climbed 24% to $27.23 billion, or $3.65 earnings per share, beating analyst estimates significantly. This performance propelled Microsoft shares up nearly 9% in after-hours trading, lifting its market capitalization above $4 trillion, making it one of only two companies to reach this level worldwide.

Cloud and AI Growth Lead the Charge

The company9s Intelligent Cloud segment, which includes Azure, generated $29.9 billion in revenue, an increase of 26%, surpassing analyst forecasts. Annual Azure revenue exceeded $75 billion, growing 34% from the prior year. Azure revenue alone grew 39% in the quarter, reflecting a major acceleration in adoption across AI and traditional workloads.

CEO Satya Nadella emphasized the company9s leadership in AI infrastructure and innovation, noting Microsoft operates over 400 data centers worldwide and continues to expand its cloud capacity to meet demand. The integration of AI capabilities such as Microsoft 365 Copilot, which now has 100 million monthly active users, boosted productivity software sales.

Strong Performance Across All Segments

The Productivity and Business Processes segment, including Microsoft 365 and LinkedIn, grew 16% to $33.1 billion in revenue. The More Personal Computing segment, encompassing Windows, devices, and gaming, rose 9% to $13.5 billion, driven by higher device sales and Xbox content revenues.

Capital Spending and Future Outlook

CFO Amy Hood forecasted continued double-digit revenue growth for fiscal 2026, with capital expenditures expected to exceed $30 billion in the first quarter alone as Microsoft expands its data center footprint to support AI growth. Although capacity constraints remain, investments in infrastructure are seen as critical to sustaining long-term growth.

This record quarter highlights Microsoft’s transformation driven by cloud and AI technology, showcasing strong financial health and a promising outlook for the year ahead.

Source image: CNBC