Microsoft Azure revenue climbs 48% in Q1 FY2027 on AI demand
Microsoft reported Azure’s revenue hit $33.2 billion in the July–September 2026 quarter, a 48% year-over-year increase, driven by AI workloads. The company’s total cloud business revenue grew 30% to $63.9 billion, while total company revenue rose 19% to $92.3 billion. Azure’s growth outpaced AWS ($42.2 billion, 37% growth in April–June 2026) but lagged Google Cloud ($30.7 billion, 103% growth in…
Key points
- Azure revenue grew 48% year-over-year to $33.2 billion in Q1 FY2027, driven by AI workloads
- Microsoft’s capital expenditure hit $39.4 billion (including leases, $45.2 billion) for the quarter
- Google Cloud’s revenue nearly doubled (103%) to $30.7 billion, outpacing AWS’s 37% growth
Microsoft’s capital expenditure for the quarter reached $39.4 billion (including leases, $45.2 billion), with $19.4 billion spent in the same period last year. The company expects $170 billion in total spending for 2026, with three-quarters allocated to short-lived GPUs and CPUs. Despite high profits—Azure’s gross margin is 66%—Microsoft warned margins may dip slightly to 65% in the next quarter as AI infrastructure costs rise. The company also reported $677 billion in commercial remaining performance obligations, a 73% jump from the prior year, signaling sustained demand.
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8 episodes →- Microsoft Azure revenue climbs 48% in Q1 FY2027 on AI demandthis story
Microsoft Azure grows by 48%. Five figures to read financial results and understand how much the three major cloud companies are profiting from the AI boom
note.com · 29 October 2026
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