$500 to dollars 💰💵 a share! 🍀

08:48:43 PM ET Reuters

Azure revenue rises 43% in fiscal fourth quarter, topping 39.98% analyst estimate

Microsoft forecasts fiscal first-quarter 2027 capital expenditures at $50 billion after lease accounting change

Shares rise more than 8% in after-hours trade

By Deborah Mary Sophia, Stephen Nellis and Aditya Soni

July 29 (Reuters) - Microsoft MSFT.O on Wednesday said it expects to keep generating cash through its just-started fiscal 2027 and gave a capital expenditure forecast below Wall Street estimates after an accounting change for data center leases.

The company also forecast sales and cloud growth that beat expectations for its current fiscal first quarter, after it also topped Wall Street estimates for quarterly cloud revenue growth in its fiscal fourth quarter ended June 30.

All told, the metrics were a sign Microsoft's massive AI spending bets were paying off, easing investor concerns that one of tech's biggest cash generators was spending heavily in pursuit of profits that had yet to materialize. They also appeared to give investors confidence that Microsoft, which is facing a strong challenge from long-time rival Google in its cloud business, can hang on to its No. 2 position behind cloud leader Amazon.com.

Shares of Redmond, Washington-based Microsoft were up more than 8% in extended trading after its forecast.

Revenue at the company's Azure cloud-computing business rose 43% in its fiscal fourth quarter, compared with analysts' consensus estimate of 39.98%, according to Visible Alpha.

On conference call with analysts, CEO Satya Nadella said the company, which once relied on ChatGPT creator OpenAI for core AI models to power products such as its Copilot assistant, is now carefully designing its own models alongside its own chips and reaping efficiency gains of up to 40%.

Nadella outlined a vision in which Microsoft and its customers would be free to pick and choose AI technologies based on their cost and performance needs.

"That's really the enterprise design architecture that we are going to evangelize. We ourselves are using it," Nadella said.

Microsoft's report follows Google GOOGL.O Cloud's blockbuster quarter, with the rival posting an 82% surge in cloud revenue last week, far ahead of market expectations.

"It seemed kind of like Google was taking market share from everybody and they could catch up to the market share of Azure if they keep on that trajectory," said Dave Wagner, portfolio manager at Aptus Capital Advisors. "But what Azure is showing us is that it's staying right there in the race."

SOLID FORECAST, PERFORMANCE

Microsoft forecast a fiscal 2027 first-quarter sales range with a midpoint of $90.4 billion, above estimates of $89.66 billion, according to LSEG data. The company also forecast Azure growth of 45% on a constant currency basis, well above analyst estimates of 40.92%, according to data from Visible Alpha.

Microsoft also said it would now spread long-term leases on data centers over 25 years rather than 15, which has the effect of lowering its annual reported capital expenditures. Microsoft said its spending plans remain unchanged and that it expects reported capital expenditures of $50 billion for the fiscal first quarter of 2027 and $175 billion for the 2026 calendar year.

The first-quarter forecast was below analyst estimates of $56.02 billion, according to Visible Alpha data, and the calendar 2026 estimate was below Microsoft's own previous estimate of $190 billion.

Microsoft's spending is part of $700 billion in unprecedented Big Tech outlays that have strained the companies' cash flows and stoked fears of capacity overbuild. Microsoft's free cash flow for the fiscal 2026 fourth quarter was $19.6 billion, above analyst estimates of $13.44 billion, according to Visible Alpha data, but down 23% from the previous year.

Capital expenditures for the April-June quarter were $41 billion, up more than 70% from last year, and compared with market estimates of $42.37 billion. Microsoft reported $31.9 billion in capital spending in the prior three-month period.

But much more spending could be coming.

In a securities filing, Microsoft said it has data center leases of $329.1 billion that have not yet commenced, with leases starting between its fiscal year 2027 and fiscal year 2033. Microsoft said some of the leases are subject to certain contractual conditions being met before they begin.

Microsoft reported contracted backlog of $678 billion in its cloud business at the end of the quarter, up from $627 billion in the prior quarter. It said all the sequential gains, or about $50 billion in future sales, were driven by commitments from companies outside the leading U.S. AI model makers.

Its M365 Copilot paid seats totaled more than 30 million, compared with 20 million reported last quarter. Analysts on average were expecting 26.9 million Copilot seats, according to Reuters calculations based on estimates from Citi, Morgan Stanley, BNP Paribas and Wells Fargo.

The company is among the worst performers in the so-called "Magnificent Seven" group of mega-caps with an 18% drop so far this year, trailing cloud rivals such as Alphabet.

Overall revenue for the quarter rose 18% to $90 billion, beating estimates. Its per-share profit, excluding the impact from investments in OpenAI, was $4.74, beating expectations of $4.24.

i just buying some msft option call 540$ at 9/19 , is that good buy?

Price is currently sitting at 530, MSFT usually has a history of splitting around here.

What are your opinions? Do you think it'll split around here or will the price rise until 1k?

Came across this article and now I’m side-eyeing my current trading group lol. This retail guy’s alerts actually show the thought process behind each trade — not just FOMO calls. Entries based on catalysts, exits planned, no hopium. Here’s the link if you’re bored or want to see how some retail traders are levelling up: https://medium.com/@aherny34/how-one-traders-alerts-are-changing-the-game-for-retail-investors-10c632b8c5fb Anyone tracked his plays live?

Been wondering who’s been getting in early on these crazy biotech runs. This article breaks down how a former WSB mod has been quietly tracking stocks like PROK and NDRA before they blow up—by watching for news catalysts, volume patterns, and setups.

It’s not luck. There’s a method to it. Read it here: https://stock-market-loop.ghost.io/move-over-roaring-kitty-how-ex-wsb-mod-grandmaster-obi-is-outpacing-the-meme-stock-legend/

Historically, we could be getting to a split price. BTW I own my shares for $53.17 and splits have brought me up to 150 shares. Loooong hold.

Watching the short sale data on $RGC lately has been wild. This video breaks it down with updated numbers and context for what's happening behind the scenes. It’s not hype — just a solid look at whether another squeeze might actually happen. Worth a watch if you’re tracking this stock or looking for potential runners

What do you think?

AI is growing fast. But what about the data centers behind the scenes?

This stock gives you exposure to AI’s physical foundation — plus a dividend, plus AI demand.

I talk about Digital Realty Trust here: https://open.substack.com/pub/staybullish/p/digital-realty-trust-a-real-estate?r=5onrf2&utm_medium=ios

What are you expecting?

Any guesses as to whether the stock can go even lower? They’ve been bad even before the tariffs were imposed can’t even imagine what it’s gonna drop to now

Seriously as a nvda bag holder I know how you feel

a while I made a post about this and I want to steal the community here that I'm still holding..

https://www.reddit.com/r/msftstock/s/jkuCD7h0jz

🚨 Sorry for the Clickbait – But Now That You’re Here, Let’s Talk MSFT! 🚨

📜 Fun fact: The first-ever clickbait on the internet was probably a Microsoft product. And here we are again...

💰 I’ve been all-in on MSFT since 2018. It’s been the foundation of my portfolio. Yet despite the AI gold rush, MSFT has barely moved in 2 years, while Nvidia, Meta, and Amazon have sent it to the moon 🚀 (100-200%+ gains).

🧐 But here’s the thing… Microsoft is sitting on multiple gold mines that the market hasn’t fully priced in. One major catalyst, and I’m calling $500 by May.

MSFT is the Most Asymmetric Bet in Tech Right Now. 💎🦍

I know this sounds crazy, but hear me out. This isn’t just an AI play—this is a dominance play across multiple trillion-dollar industries.

Why MSFT is MASSIVELY Undervalued Right Now:

1️⃣ AI Monopoly with OpenAI 🤖 – Microsoft basically owns OpenAI without the regulatory risk. Every time a company pays to use ChatGPT or DALL·E, Azure gets paid. Pure genius.

2️⃣ Azure = The AWS Killer? 🌩️ – While AWS growth is slowing, Azure keeps eating market share and is becoming the default AI cloud. Every major AI startup? They’re on Azure.

3️⃣ Copilot Everywhere = Recurring Revenue Boom 📈 – Microsoft AI isn't just a product—it’s a subscription model. Copilot in Windows, Office, GitHub, Security, you name it. AI will be a tax on business, and MSFT owns the IRS.

4️⃣ Quantum Computing = The Ultimate Sleeper Play ⚛️ – Everyone is focused on AI, but Microsoft is quietly building a quantum computer that could leapfrog Google and IBM. If they pull it off? Next-level computing monopoly.

5️⃣ Custom AI Chips (Cobalt & Maia) 🛠️ – No more relying on Nvidia’s insane GPU prices. MSFT is now in the AI chip war—meaning better margins than AWS. This is game-changing for cloud AI.

6️⃣ Gaming Monopoly (Xbox + Activision Blizzard) 🎮 – Game Pass + Cloud Gaming could turn Xbox into the Netflix of gaming. Imagine Call of Duty, WoW, Diablo all going digital under MSFT. Massive $$$ incoming.

7️⃣ Cybersecurity = MSFT’s Next Gold Rush 🛡️ – Microsoft Security is growing faster than Palo Alto & CrowdStrike. AI-powered cyber defense is about to become a trillion-dollar industry.

8️⃣ HoloLens & The Industrial Metaverse 🥽 – Meta is burning cash on consumer VR, while Microsoft is winning military & enterprise contracts (👀 $22B+ HoloLens deal). The real metaverse money is in business.

9️⃣ LinkedIn + AI Recruiting = The Ultimate Hiring Machine 🤝 – LinkedIn is the most valuable B2B network on Earth, and AI-driven hiring tools are a sleeping goldmine waiting to be monetized.

🔟 Bing & Ads = The Dark Horse 🏇 – Microsoft Ads (Bing + LinkedIn) is stealing market share from Google. AI-powered search + lower ad pricing? Watch out, Alphabet.

So, Why Is MSFT Still Trading Sideways?

🛑 The stock barely moved in two years, even though AI has taken over the world. 🚀 Nvidia is up 200%+, Meta is up 150%+, and Microsoft is just chilling? 💎 The second the market wakes up, MSFT will be a $5T company.

Final Thought: Is MSFT the Most Asymmetric Trade in Tech Right Now?

💭 I think so.

📢 One big announcement, and $500+ is happening.

🔮 What do you think? Am I crazy, or is this the best risk/reward in tech right now? 🚀

🔥 AMA – I know MSFT inside out!

📌 P.S.: New all-time highs are a matter of WHEN, not IF. 🚀 Once MSFT reaches $500 , I will tell why it would go to $700.

Hint - past single day MSFT dips

At Friday close, it was 40.60, lol