Microsoft Q2 Revenue Jumps 17% to $81.3B, Capex Soars 66% to $37.5B as Sanders Targets AI Data Centers
Microsoft reported Q2 FY2026 revenue of $81.3 billion (up 17% YoY) with Azure revenue rising 39%, but capex spiked to $37.5 billion (66% YoY) on a path to ~$100 billion infrastructure spending, prompting a 5% after-hours dip. Senator Sanders unveiled legislation to ban new AI data centers, risking Azure expansion.
1. Q2 FY2026 Earnings Highlights
Microsoft reported revenue of $81.3 billion in Q2 FY2026, representing a 17% year-over-year increase, while Azure sales climbed 39% on robust enterprise cloud demand.
2. Surging Infrastructure Expenditure
Capital expenditures surged 66% to $37.5 billion in the quarter, putting Microsoft on course for approximately $100 billion in annual infrastructure spending to support AI and cloud workloads.
3. Market Reaction
Shares declined 5% in after-hours trading as investors weighed the company’s heavy capex commitments against growth prospects and margin outlooks.
4. Proposed AI Data Center Ban
Senator Sanders introduced legislation to prohibit the construction of new AI data centers, a move that could constrain Microsoft’s ability to expand Azure capacity and drive future cloud revenue.