July 31 Microsoft (NASDAQ:MSFT) shares surged about 8% in premarket trading Thursday after the tech giant delivered a stronger?than?expected fiscal fourth quarter and offered upbeat guidance, fueled by cloud and AI growth.
Azure revenue rose 39% year over year, topping Wall Street’s 34% estimate and surpassing $75 billion on the trailing year, with AI workloads driving incremental demand.
Analysts at Wedbush lifted their price target to $625 from $600, citing Microsoft’s ability to monetize the AI revolution as enterprises accelerate spending.
For fiscal 2026, Microsoft expects Intelligent Cloud revenue between $30.1 billion and $30.4 billion, ahead of the Street’s $29.42 billion consensus.
Azure growth is projected near 37% in constant currency, with management acknowledging that capacity constraints may persist through the first half of the year.
Capital spending is set to exceed $30 billion in the first quarter of fiscal 2026, reflecting an annualized $120 billion run rate to expand data centers and cloud infrastructure.
Analysts said the results signal Microsoft is entering a new phase of AI?driven growth, with fiscal 2026 shaping up as an inflection point for its cloud and AI business.
This article first appeared on GuruFocus.
