Microsoft Forecasts 37%-38% Azure Growth While CapEx Jumps to $37.5B
Microsoft’s cloud arm Azure grew 38% in the quarter, meeting forecasts, while the company forecast 37%-38% growth for the next period. Capital expenditures surged 66% year over year to $37.5 billion, driving record spending that spurred an 11% intraday stock plunge as investors questioned returns.
1. Azure Revenue Growth and Outlook
Azure revenue climbed 38% year over year to meet expectations, and Microsoft guided for 37%–38% growth in the upcoming quarter, reflecting sustained enterprise demand for cloud services and AI offerings.
2. Capital Expenditures Surge
Microsoft’s capital spending reached $37.5 billion, up 66% from last year, driven by data center expansion and infrastructure to support AI workloads, raising concerns over returns on these heavy outlays.
3. Financial Results and Market Reaction
Full-year revenue rose 17% to $81.3 billion, with profit at $5.16 per share boosted by OpenAI-related gains, yet the stock plunged 11% intraday on investor scrutiny of escalating costs versus growth.
4. Operational Metrics and Backlog
The company reported 15 million M365 Copilot subscriptions and a customer backlog of $625 billion—45% tied to OpenAI—with a recent $250 billion transaction underscoring long-term commitments and capacity challenges after large-scale capex projects.