Microsoft Azure Tops $100 Billion in Annual Revenue Amid Stock Underperformance

Microsoft's cloud platform, Azure, has surpassed $100 billion in annual revenue for the first time. This milestone was revealed on its earnings call for the fourth quarter of fiscal 2026, which ended June 30. The company plans to regularly report Azure revenue moving forward.

Azure's achievement is a significant one, but it may not have been enough to boost Microsoft's stock performance. Despite surpassing $100 billion in annual revenue, the company's stock has made only modest gains this year, rising by about 3%. This is a stark improvement over where it was a few months ago, when it suffered a 27% year-to-date decline.

One reason for Microsoft's underperformance may be its massive capital expenditures, which were $116 billion in fiscal 2026. Additionally, the company's perceived struggles with AI have weighed on the stock. Its Copilot platform has been criticized for not being the AI engine of choice unless one is operating on a Microsoft platform such as Windows or Visual Studio.

However, despite these challenges, Microsoft's income growth remains strong. The company earned 31% more than it did a year ago, reporting $134 billion in net income for the fiscal year. Its P/E ratio of 28 may be reasonable given its growth, but Alphabet's revenue grew by 24% in the first half of 2026, and its P/E ratio is just 17.