Microsoft Q3 Azure Revenue Up 40%, Shares Fall 2%

Microsoft Corp. reported a 40 percent increase in revenue from its Azure cloud-computing unit for the fiscal third quarter ended March 31, meeting Wall Street expectations but disappointing investors amid concerns over artificial intelligence competition, as shares fell more than 2 percent in extended trading on Wednesday.

The growth marked a slight acceleration from the 39 percent rise in the prior quarter and aligned with a consensus estimate of 40 percent. Overall revenue reached $82.89 billion, surpassing forecasts of $81.46 billion, while earnings per share came in at $4.27, beating expectations of $4.03. Total cloud revenue hit $54.5 billion, exceeding estimates of $53.78 billion. Capital expenditures rose 49 percent from a year earlier to $31.9 billion but fell from $37.5 billion in the previous quarter and came in below analyst projections of around $34.9 billion to $35.3 billion.

Microsoft highlighted momentum in its AI offerings, disclosing an annual AI revenue run rate of $37 billion from infrastructure sales to partners like OpenAI and its own products. Users of Microsoft 365 Copilot, a $30-per-month AI assistant for businesses, grew to 20 million from 15 million...