On a night when Alphabet fell, Microsoft showed investors what they wanted from an AI spender: faster cloud growth, less spending than feared and positive cash flow.
How did Microsoft do, and why did the stock rise?
Microsoft (MSFT) reported fiscal first-quarter revenue of $92.3 billion on Wednesday, Oct. 28, 2026, up 19% and above the roughly $90.7 billion analysts expected. Adjusted earnings of $4.89 a share topped estimates of about $4.73. Azure cloud sales grew 48%, and the stock rose about 4% after hours.
The quarter covers July through September 2026, the first quarter of Microsoft's 2027 fiscal year. The figures come from Microsoft's earnings press release, and the estimates come from SiliconANGLE and a pre-report preview from TheStreet. On a standard accounting basis, earnings were $4.92 a share, up 32%, and net income was $36.6 billion. Operating income rose 21% to $45.9 billion.
Chief Financial Officer Amy Hood said in the release that results "exceeded expectations across revenue, operating income, and earnings per share."
What drove the quarter?
The cloud did most of the work. Microsoft Cloud revenue, which bundles Azure, cloud versions of Office and other online services, rose 30% to $63.9 billion. Azure, the platform companies rent for computing power and AI, grew 48%. For the first time, Microsoft gave Azure's revenue in dollars, $33.2 billion, above the $32.3 billion analysts expected, according to SiliconANGLE and Traders Agency.
Microsoft also changed how it reports its business. It now uses two segments instead of three. Agents and Infra, which holds the cloud and business software, brought in $76.8 billion, up 25%. Devices and Consumer, which includes Windows, Xbox and Surface, fell 3% to $15.5 billion. Windows and devices revenue fell…
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Compound growth estimate
Estimated total
$17,175
Your contributions
$13,000
This is an estimate, not a prediction. Monthly compounding; taxes, fees and inflation are excluded.
This article is for educational purposes only and isn't personalized financial, tax or legal advice. Consider talking with a qualified professional about your situation.
Kiara Miller — Founder & Editor
Kiara Miller is the founder and editor of The Evergreen Edit. He has been doing independent finance research for two decades and reviews every article before it's published.
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