Microsoft's AI and Cloud Growth Drive Strong Q3 FY26 Results Despite Share Decline
Toasted just enough. A reliable bake, gently seasoned.
Summary
Microsoft shares have declined despite strong fundamental performance. The company's AI business reached a $37 billion annualized revenue run rate (up 123% YoY), Microsoft 365 Copilot has over 20 million paid seats, and GitHub Copilot Enterprise is used by nearly 140,000 organizations. Commercial remaining performance obligations hit $627 billion, indicating strong contracted future revenue. Intelligent Cloud revenue grew 30% to $34.68 billion, with Azure up 40%. Q3 FY26 EPS of $4.27 beat estimates of $4.07, with net income up 23.06%.
Key quotes
· 4 pulledMicrosoft reported an AI business annualized revenue run rate of $37 billion, up 123% year over year.
Commercial remaining performance obligations reached $627 billion, indicating contracted future revenue.
Intelligent Cloud revenue rose 30% to $34.68 billion, with Azure and other cloud services up 40%.
Q3 FY26 delivered EPS of $4.27 versus a $4.07 estimate, with net income up 23.06% on revenue.
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