Microsoft shares rise after earnings as Azure growth and margins impress
Azure revenue rose 48% to $33.2 billion and the operating margin reached 50%, according to Dow Jones Newswires. Investors weighed growth against AI spending.
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what happened
Microsoft shares gained about 3% in extended trading after results, while Alphabet fell 9%, according to Dow Jones Newswires. The market rewarded a mix of fast growth and restrained spending on artificial intelligence.
Azure, the cloud unit, brought in $33.2 billion in the September quarter, up 48% from a year earlier, versus expectations of about 47% growth. The company forecasts Azure growth of as much as 50% in the current quarter. Microsoft's operating margin reached 50%, compared with 32% at Alphabet.
Analysts at Jefferies and Investing.com said the results point to returns on AI investment, with demand still exceeding supply.
why it matters
For markets, the reaction signals that investors now expect large technology companies to show returns on AI spending, not just revenue growth. The divergence between Microsoft and Alphabet shows cost discipline is becoming a key factor in valuing the sector's largest names.
market impact
US tech sector: Microsoft results support confidence in AI returns, pressure on Alphabet
- MSFT pressure up — Azure growth and margins above expectations strengthen confidence in AI spending returns
- GOOGL pressure down — weak search growth and infrastructure spending exceeding cash generation
tags
instruments
sources
- The major reason Microsoft's stock is heading higher after earnings — Dow Jones Newswires, 29 October 2026 at 00:10 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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