Microsoft Share Price In Focus After 19% Revenue Growth And Strong Azure Results, With AI Spending Set To Accelerate

Microsoft’s first-quarter fiscal 2027 results exceeded market expectations. Strong demand for its Azure cloud infrastructure helped drive the performance. Revenue growth also reflected the company’s expanding artificial intelligence (AI) business.

However, higher investment requirements and weaker sales of Windows licences and devices presented contrasting signals.

The Microsoft share price rose 4% in extended trading on Wednesday, 28 October 2026, after the results announcement. The stock closed at ₹531.01, down 0.06% on Nasdaq.

Microsoft First-Quarter Results: Key Financials Highlights

The company’s net income increased to $36.63 billion from $27.75 billion a year earlier. Earnings per share (EPS) rose to $4.92 from $3.72, while adjusted earnings excluded an approximately $200 million loss on its OpenAI investment.

Adjusted earnings per share came in at $4.89, above the $4.73 expected. Revenue reached $92.28 billion against the $90.69 billion consensus, an increase of 19% year-on-year (YoY).

Azure revenue reached $33.17 billion, exceeding the $32.32 billion analyst estimate. Growth accelerated to 48% from 42% in the previous quarter. The company’s Agents and Infrastructure segment recorded revenue of $76.8 billion, up nearly 25%.

The number of users of Microsoft 365 Copilot increased 50% from the previous quarter. The company also said its Microsoft 365 E7 productivity bundle had reached millions of seats.

Free Cash Flow Falls And AI Infrastructure Investment Rises

Capital expenditure and finance leases totalled $45.2 billion, up around 30% YoY. About 75% of capital expenditure was tied to shorter-lived assets, including chips and graphics processing units (GPUs), compared with around 66% over the previous three quarters.

Free cash flow declined 27% to $18.63 billion. The company’s finance chief said some expected third-party capacity deliveries were delayed. Microsoft expects capital expenditure and finance leases to exceed $50 billion in the fiscal second quarter and has indicated $170 billion for calendar year 2027.

The company expects second-quarter revenue of $96 billion to $97.1 billion. It also projected Azure growth of 49% to 50% at constant currency, with demand continuing to exceed supply.

Microsoft Layoffs And Voluntary Buyouts In Focus

Microsoft said it would cut 4,800 jobs during the fiscal first quarter. It subsequently announced a voluntary buyout offer covering up to 60,000 employees, as it seeks to balance substantial AI investment with capital efficiency.

The Microsoft voluntary employee buyout of 60,000 adds another dimension to the company’s restructuring efforts. Investors will be watching how its spending, workforce measures and cloud expansion affect future profitability and cash generation. These developments also keep Microsoft layoffs, Microsoft buyouts and the Microsoft voluntary exit offer in focus alongside the latest earnings and any upcoming Microsoft news.

For investors tracking Microsoft Corporation Common Stock, or MSFT stock, the results highlight the strength of cloud demand while leaving cash flow and investment efficiency as important areas to monitor.

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