Microsoft Surges on Strong Azure Growth, Holds 2026 AI Capex Guidance Steady
Microsoft's cloud performance and disciplined spending reassured investors, contrasting with Meta's earnings miss and broader market anxieties over AI investment returns.
The story
Microsoft delivered a strong fiscal fourth-quarter earnings report on Wednesday, providing a much-needed positive signal amidst market concerns about AI infrastructure spending. The company reported overall revenue of $90.01 billion, surpassing analyst expectations of $87.62 billion.
A key highlight was the acceleration of Azure cloud computing services growth to 43% year-over-year, up from 40% in the previous quarter, pushing full-year Azure revenue past the $100 billion mark for the first time. Crucially, Microsoft maintained its calendar 2026 capital expenditure plans, which analysts had been watching closely.
This stability in capex guidance, alongside robust cloud demand, helped assuage investor fears that AI investments were outstripping returns, a sentiment that had impacted other Big Tech stocks. Shares jumped approximately 8% in after-hours trading following the announcement.
Who moved
Microsoft
What Changed: Reported strong fiscal Q4 earnings with Azure cloud revenue growth accelerating to 43% and maintained calendar 2026 capital expenditure guidance.
Why It Matters: The performance and stable capex guidance alleviated investor concerns about AI spending returns, leading to an approximate 8% jump in shares after hours.
Meta
What Changed: Reported Q2 revenue of $60.80 billion (slightly above estimates) but diluted EPS of $6.18 missed expectations, and net income fell 14%.
Why It Matters: The earnings miss and a high, though narrowed, full-year capex guidance of $130B-$145B led to a 9.5% drop in shares after hours, reflecting investor impatience for AI project returns.
Apple
What Changed: Briefly touched a $5 trillion market valuation on Tuesday, July 28, becoming the second company in history to do so.
Why It Matters: Analysts attribute this valuation surge, in part, to Apple's comparatively lower spending on AI infrastructure, a strategy currently favored by investors wary of high capex.
Products & launches
Azure
Company: Microsoft
What: Announced general availability from a new cloud region in India, India South Central, with campuses in Hyderabad.
Smart Home Display
Company: Apple
What: Reportedly working on a new AI-powered smart home display with features akin to a smart speaker with a screen for home control.
Agent Core Gateway
Company: Amazon Web Services (AWS)
What: Its agent core gateway now supports the latest version of the Model Context Protocol (MCP), a standard for AI system communication.
Money & markets
Microsoft. Reported fiscal Q4 revenue of $90.01 billion, exceeding estimates of $87.62 billion, with Azure growth accelerating to 43% and full-year Azure revenue clearing $100 billion.
Meta. Reported Q2 diluted EPS of $6.18, missing the $7.14 estimate, and a 14% drop in net income to $15.85 billion.
Apple. Briefly achieved a $5.04 trillion market value on Tuesday, July 28, 2026.
What we'll be watching
- Apple and Amazon are scheduled to report earnings after market close on Thursday, July 30.
- The Federal Reserve's rate decision is expected on Thursday, July 30.
- Advance second-quarter GDP data is due on Thursday, July 30.
- June PCE (Personal Consumption Expenditures) data is expected later this week.
Reporting + analyst voices: grounded via Google Search at publish time.