Microsoft weekly recap: Azure growth and surging AI spending

what happened

TradingView reports that Microsoft Corporation (NASDAQ:MSFT) closed its fourth quarter with $90 billion in revenue, up 18% year on year, and GAAP EPS of $4.74. Azure revenue increased 43%, with annual revenue exceeding $100 billion; Intelligent Cloud grew 32%, while Microsoft Cloud reached $59.3 billion, up 27%. For the first quarter of fiscal 2027, Microsoft guided to roughly 45% Azure growth in constant currency.

According to TradingView, analysts expect AI’s share of Microsoft revenue to expand through its OpenAI stake, consumption-priced 365 Copilot and support for multiple AI models. BNP Paribas raised its price target to $604, while Scotiabank lifted its target from $510 to $615, leaving its rating unchanged and citing Microsoft’s enterprise AI leadership and OpenAI-driven B2B demand. Microsoft also reported a surge in commercial performance commitments linked to its cloud and AI offerings.

Microsoft reported $116 billion in AI capital spending, alongside a 6% decline in free cash flow. On Oct. 8, 2026, the U.S. Labor Department suspended the company from the PERM program, blocking new filings and pausing pending ones. Existing H‑1B statuses were not revoked, while the shares fell about 1.35%.

Microsoft unveiled the Surface Laptop Ultra with Nvidia RTX Spark; preorders opened Oct. 9, shipments are due Oct. 16, and prices range from $2,599 to $5,899. The company added MXC to enforce operating-system-level rules, launched Microsoft-Decision-1 for automated enterprise decisions, and said Copilot uses a hybrid model: demanding tasks run in the cloud, while routine or privacy-sensitive work runs on the device. Microsoft also said Meta’s Muse will become a native Windows app, with Windows adding more AI tools, execution containers and security controls while simplifying AI setup in Windows 11.

why it matters

The update combines strong cloud growth with exceptionally high AI investment and weaker free-cash-flow generation. Azure guidance, new products and higher analyst targets may affect sentiment toward MSFT, while the PERM suspension adds a regulatory consideration.

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