Microsoft shares surged more than five percent on Wednesday after the company reported stronger-than-expected revenue and profit, driven by its Azure cloud computing division. Azure grew by 48 percent in the September quarter, contributing to Microsoft's $92.3 billion in total revenue and $36.6 billion in profit. Analysts had anticipated $90.6 billion in revenue and $35.1 billion in profit, according to FactSet.
The earnings report follows Microsoft's recent offer of voluntary buyouts to about 60,000 employees, roughly a quarter of its workforce, as the tech giant invests heavily in artificial intelligence. This is the second voluntary buyout offer this year, after an earlier offer in April to seven percent of its US workforce.
Microsoft also unveiled a new Surface Ultra laptop earlier this month, priced at over $2,500, which runs on Nvidia's AI chips. The company nearly doubled its spending on 'property and equipment' to $39 billion compared to the same period last year, adding 24 new data centers globally. Capital expenditures reached $45.2 billion, with three-quarters spent on short-lived assets like memory chips and storage.
Looking ahead, Microsoft expects capital expenditures to exceed $50 billion in the final quarter of 2026, bringing its total spending for the year to $170 billion. The company competes with Amazon Web Services (AWS) and Google parent Alphabet for cloud computing services customers, with AWS leading the sector by revenue in the second quarter.