Microsoft Stock Jumps 4%: Azure Revenue Surges 48% to $33.2 Billion

Microsoft beat Wall Street on every headline number on Wednesday, October 28, 2026 — and for the first time ever, it told investors exactly how big Azure is: $33.17 billion in one quarter, up 48%. Shares rose about 4% in after-hours trading as the fiscal first-quarter results landed, in sharp contrast to Alphabet, which fell more than 10% after hours on the same evening.

What happened

Microsoft reported revenue of $92.3 billion for the quarter ended September 30, 2026, the first quarter of its 2027 fiscal year — up 19% from a year earlier and above the $90.6 billion analysts expected. Adjusted earnings were $4.89 per share, excluding the impact of its OpenAI investment, against expectations of about $4.72 to $4.73. On a GAAP basis, net income rose 32% to $36.6 billion, or $4.92 per share, and operating income rose 21% to $45.9 billion.

The headline inside the headline was Azure. Microsoft disclosed Azure's quarterly revenue in dollars for the first time, as part of a new reporting structure with two segments. Azure brought in $33.17 billion, topping the $32.32 billion StreetAccount consensus, and its 48% growth accelerated from 42% in the June quarter. Microsoft Cloud revenue overall reached $63.9 billion, up 30%, and the new Agents and Infra segment — which houses Azure, Microsoft 365, Dynamics and related businesses — grew about 25% to $76.8 billion.

Why it is blowing up

First, the disclosure itself is news. Investors have modelled Azure for years from a growth percentage alone; a hard dollar figure — $33.2 billion, larger than many entire cloud companies — resets how the business is valued and compared. Second, the growth rate went the right way. At a scale this large, cloud growth is supposed to slow. Instead it accelerated by six points in one quarter, which management and analysts read as demand for AI and core cloud services outrunning even Microsoft's rapid data-centre build-out.

Third, the timing sharpened the reaction. The results arrived hours after the Federal Reserve held rates at 3.75% to 4.00%, and alongside Alphabet's miss. The Wall Street Journal's live coverage noted the split verdict: Microsoft up in postmarket trading on a $92.3 billion revenue beat, Alphabet down more than 10% on a revenue shortfall.

Key facts

Revenue: $92.3 billion, up 19%, versus about $90.6 billion expected, according to GeekWire and the WSJ.

Earnings: Adjusted EPS of $4.89 versus about $4.72 expected; GAAP EPS of $4.92, with net income up 32% to $36.6 billion, as detailed by Securities.io.

Azure: $33.17 billion in revenue, up 48%, beating the $32.32 billion expected — the first dollar figure Microsoft has ever published for Azure, reported by SourceFirst News summarising CNBC's coverage.

Backlog: Commercial remaining performance obligation rose 73% to $677 billion, a measure of contracted future revenue.

Stock reaction: Shares closed the regular session at $531.01 and were up 3.76% at $550.95 in extended trading at 6:20 p.m. EDT, according to CNBC market data cited by SourceFirst; GeekWire also reported a rise of nearly 4% after hours. Full earnings detail is tracked by MarketBeat.

The other side of the quarter

The beat was not uniform. Spending remains enormous: capital expenditures and finance leases reached about $45.2 billion in the quarter, and free cash flow fell 27% to about $18.6 billion as Microsoft races to add capacity. The consumer side also softened, with Windows OEM and devices revenue down 22% amid higher memory and storage costs. Those are the pressure points bears will press on the earnings call and in Thursday's session.

On the call, chief executive Satya Nadella pointed to usage rather than just capacity: Microsoft Cloud revenue surpassed $63 billion with growth accelerating to 30%, Copilot daily users rose nearly 50% quarter over quarter, and the number of customers with more than 50,000 Copilot seats increased more than eightfold year over year.

What happens next

Attention now turns to guidance for the December quarter, especially the Azure growth outlook, and to whether Thursday's regular session holds the after-hours gain. Amazon reports on Thursday and Apple follows next week, so Microsoft's print sets the bar for the rest of Big Tech earnings season: disclose the cloud dollars, show acceleration, and the market will reward the spending. Miss, as Alphabet just did, and it will not. This report describes what happened and how markets reacted; it is not a recommendation to buy, sell or hold any security.

FAQ

How much revenue did Microsoft report for fiscal Q1 2027?

Microsoft reported $92.3 billion in revenue for the quarter ended September 30, 2026, up 19% year over year and above the roughly $90.6 billion analysts expected.

How big is Azure now?

Azure generated $33.17 billion in the quarter, up 48% — the first time Microsoft has disclosed Azure's revenue in dollars rather than only a growth rate.

Why did Microsoft stock rise after hours?

Shares rose about 4% after hours because revenue, adjusted earnings of $4.89 per share and Azure growth all beat expectations, while rival Alphabet fell sharply on its own results the same evening.

What were the weak spots in Microsoft's quarter?

Free cash flow fell about 27% to roughly $18.6 billion amid record capital spending of about $45.2 billion, and Windows OEM and devices revenue fell 22%.