Microsoft beats earnings forecasts but shifts timing of some AI projects

what happened

Microsoft reported fiscal first-quarter revenue of $92.3 billion, up 19% from a year earlier. Diluted earnings per share came in at $4.92, a 32% increase. According to TradingView, both revenue and earnings beat analyst forecasts, while Azure revenue climbed 48%.

The company said some GPU-related cloud contracts have moved into the first half of 2027, which will affect the timing of Azure growth. Quarterly capital spending and finance leases totaled $45.2 billion. Bloomberg reports that Microsoft is phasing out rented AI computing capacity from Oracle and will not renew the agreement, citing changing requirements and older Nvidia hardware.

Microsoft also spent about $5 billion less than planned on third-quarter capital expenditures because of delays at third-party data centers, including IREN's Texas site. It withdrew from an Nscale AI site in England over the provider's electricity access and reportedly will not renew its Texas contract. Together with Amazon, Alphabet, Meta and Oracle, it has raised over $370.7 billion through U.S. investment-grade bonds this year.

why it matters

The key tension in the report is that operating results are strong, yet part of the AI infrastructure build-out is being delayed and reliance on borrowed funds is growing. Reviewing third-party providers weighs on expectations for partners such as Oracle and IREN, while Microsoft says it will prioritize capacity at its own data centers.

market impact

Microsoft shares: strong results support the stock; Oracle: lost contract weighs on the AI cloud segment

• ▲Microsoft shares pressure up — revenue and earnings beat forecasts, with Azure growing 48%
• ▼Oracle shares pressure down — Microsoft is not renewing its rented AI computing capacity from Oracle

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