Microsoft Q3 revenue up 18% with $37B AI run rate as shares fall 4%
MSFT•Microsoft posted Q3 2026 revenue growth of 18% with AI business hitting a $37B run rate and Azure growing 39%, while AWS and Google Cloud see sharper reacceleration. Shares slid 4% as investors weighed the company’s AI investments and a revised OpenAI exclusivity deal raising concerns over its AI edge.
1. Q3 2026 Earnings Highlights
Microsoft posted Q3 2026 revenue growth of 18%, driven by its AI business reaching a $37B annual run rate and Azure growth of 39%.
2. Cloud Growth Comparison
Azure's 39% year-on-year expansion lagged the sharper reacceleration seen at AWS and Google Cloud, raising questions about Microsoft’s cloud momentum and competitive positioning.
3. AI Infrastructure Investment
Heavy spending on AI infrastructure contributed to investor concerns as capital expenditures rose to support large-scale AI services, putting pressure on near-term margins and share performance.
4. Revised OpenAI Exclusivity Deal
The updated exclusivity agreement with OpenAI narrowed Microsoft’s AI advantage by allowing other cloud providers to deploy OpenAI models, prompting investor scrutiny over long-term differentiation.
