Microsoft shares surged by as much as 10% in pre-market trading on Thursday after the company said its heavy investment in artificial intelligence is paying off, with Azure demand still running ahead of available capacity. The numbers are blunt. The company forecast revenue of between $89.85 billion and $90.95 billion in the July-September quarter, and it said Azure revenue would grow by approximately 45% in constant currency, up from 43% in the quarter just ended.
The AI Money Machine
Microsoft reported revenue of $90 billion in the April-June period, up 18% year-on-year and above analysts’ forecast of $87.6 billion. Net profit climbed 31% to a record $35.8 billion, helped by a $3.2 billion unrealised gain on Microsoft’s investment in the AI company Anthropic. Diluted earnings per share reached $4.81, above analysts’ forecast of $4.24. Microsoft Cloud revenue was $59.3 billion, up 27% year-on-year, while Azure and other cloud services revenue increased by 43%. The company said demand for Azure continued to exceed available capacity, even after it brought additional computing infrastructure online during the quarter.
For the full fiscal year ended in June, Microsoft reported $331.8 billion in revenue. Satya Nadella said in a statement on Wednesday, "This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their AI transformation." That’s the language of the boardroom, where workers become “seats” and transformation means more dependence on corporate systems that nobody elected.
Michael J. Wolf, founder and CEO of Activate Consulting, said the concurrent Azure and Copilot growth indicates that Microsoft is "winning on both fronts," adding that the company is supplying cloud infrastructure for enterprise AI while monetising AI tools embedded in products workers use every day. The phrase says plenty. The infrastructure gets built at scale, the tools get pushed into daily work, and the profits flow upward.
Costs, Cuts, and the Corporate State
Amy Hood said the company’s capital expenditure plans for the 2026 calendar year remain unchanged. She said an accounting change will bring that guidance closer to approximately $175 billion, but in practice the expectations remain "unchanged." Hood had earlier said Microsoft expects to invest $190 billion in capital expenditures in 2026. Bryan Hayes, an investment strategist at Zacks Investment Research, said that "for the first time in three quarters, the market appears willing to grant that the spending is buying something real." Danielle Criste, Microsoft’s director of investor relations, said, "We remain very confident in the long-term return on these investments, given these strong demand signals, the increasing product usage we’ve seen and the efficiencies that we’re driving across the platform."
That’s the logic of the platform economy in plain sight: massive capital spending, relentless expansion, and “efficiencies” measured from above. The people doing the work don’t appear in the earnings call except as usage, seats, and margins.
Meta Platforms offered a different version of the same machine on Wednesday. Its second-quarter profit declined even as revenue beat Wall Street’s expectations, as legal expenses and severance costs weighed on results. The Facebook and Instagram parent company earned $15.85 billion in the April-June period, down 14% from $18.34 billion in the same period a year earlier. Revenue grew 28% to $60.8 billion from $47.52 billion. Meta earned $6.18 per share, below the $7.19 expected by analysts surveyed by FactSet, while analysts had forecast revenue of $60.22 billion.
Total costs and expenses jumped 55% to $42.03 billion, including $2.4 billion in charges related to legal proceedings and $1.18 billion in severance expenses connected with Meta’s May workforce reduction. Its operating margin narrowed to 31% from 43% a year earlier. Mark Zuckerberg said in a statement, "AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities. The results are already showing, and I’m optimistic about the potential ahead."
The corporate script is familiar. AI is sold as inevitability, investment as destiny, and layoffs as a line item. The profits are record-breaking. The costs are social, legal, and human. The boardrooms call it progress.