Azure Breaks $100B Barrier as MSFT Reaccelerates Growth
Microsoft's recent quarterly performance has convinced one analyst to keep buying shares of the company. Azure, Microsoft's cloud computing platform, crossed $100 billion in annual revenue for the first time and saw growth accelerate to 43% year-over-year in Q4.
The commercial remaining performance obligations (RPO) figure has risen to $678 billion, up 84% year-over-year, indicating strong enterprise demand for Microsoft's AI capacity. This is particularly significant because it shows companies are committing to fund AI capacity before deployment.
Microsoft's productivity software suite, including Office and Windows, also remains a key driver of revenue. The company's $678 billion RPO represents contracted revenue riding on these products, which are already installed at nearly every large enterprise.
While Microsoft's capital expenditures have surged 110% to $116B in FY26, free cash flow fell 6%. However, the analyst remains optimistic due to the strong RPO trajectory and Copilot seat count, indicating customers are paying for AI capacity as it is being built.