By <\/p>\n
Seattle Times business reporter<\/p>\n
Microsoft is signaling its massive investments in artificial intelligence is showing results.<\/p>\n
The Redmond-based tech giant posted strong cloud computing growth and said its overall AI business is on track to bring in $37 billion in revenue this year, a 123% year-over-year increase. But that\u2019s against a backdrop of $88 billion spent on capital expenditure investments in AI-related infrastructure during the company\u2019s 2025 fiscal year, which ended in June. Microsoft has roughly spent an additional $104 billion since then.<\/p>\n
Microsoft reported $82.9 billion in revenue for the third quarter of its 2026 fiscal year, which ran from January through March, beating analysts\u2019 estimates. Microsoft also reported $31.8 billion in profit, a 20% increase from the same quarter last year.<\/p>\n
The company\u2019s closely watched cloud division, Azure, reported better-than-expected results with revenue growth up 40% year-over-year.<\/p>\n
\u201cWe delivered results that exceeded expectations across revenue, operating income, and earnings per share, reflecting strong execution and growing demand for the Microsoft Cloud,\u201d Microsoft Chief Financial Officer Amy Hood said in a news release Wednesday.<\/p>\n
As investors look for signs that the tech industry\u2019s enormous investments in AI will pay off, cloud revenue growth and capital expenditures have been highly scrutinized. After reporting growing investment costs during the last earnings cycle, Microsoft\u2019s results on Wednesday come off the worst performing quarter for its stock price since 2008.<\/p>\n
Wall Street has dinged tech titans for higher-than-projected capital expenditure costs, a problem for Meta on Wednesday after the company raised its projected costs for the year.<\/p>\n
Microsoft has not issued any formal projections for capital expenditure costs this year. It reported $31.9 billion for the quarter, down from the previous two quarters but still up by more than $10 billion from a year prior.<\/p>\n
Microsoft\u2019s stock price fluctuated in after-hours trading and was down by as much as 3%.<\/p>\n
Visual reporting of local news and trends is partially underwritten<\/a> by Microsoft Philanthropies. The Seattle Times maintains editorial control over this and all its coverage.<\/p>\n