Microsoft stock is surging more than 15 percent Wednesday after the company reported fiscal Q4 2026 earnings Wednesday evening that beat Wall Street on every major line, and sent futures higher across the board overnight.
Revenue came in at $90.01 billion, up 18 percent year over year and ahead of the $87.62 billion consensus. Adjusted EPS of $4.74 beat the $4.24 estimate by 12 percent. The stock was already down 19 percent for the year before the report. That deficit has been substantially erased in a single session.
The headline number driving the reaction is Azure. Microsoft's cloud platform grew 40 percent year over year in the quarter, accelerating from 33 percent the prior quarter, and crossed $100 billion in annual revenue for the first time in company history.
CEO Satya Nadella said demand for AI services is currently outpacing capacity and that Microsoft is spending aggressively to catch up, with quarterly capex of $35.8 billion, more than double a year ago.
One caveat worth noting: approximately $3.2 billion of the earnings beat came from a gain on Microsoft's investment in Anthropic, adding roughly 33 cents per share to EPS. Strip that out and the underlying beat is still real but smaller.
The stock is reacting to the Azure story regardless, the market has been waiting for proof that AI infrastructure spending is translating into AI revenue, and a 40 percent Azure growth rate with demand exceeding supply is that proof.