Morningstar cheered Microsoft Azure’s strength and said near-term demand indicators for the company remain robust.
- For Q4 2026, revenue came in at $90 billion, and adjusted earnings per share were $4.81.
- For Q1 2027, revenue is expected to come between $89.85 billion and $90.95 billion.
- Azure saw 43% growth in Q4; Microsoft forecast a 45% growth for the unit in Q1.
Analysts on Thursday reiterated their bullish stance on Microsoft (MSFT) following fourth-quarter results and a forecast that surpassed analyst expectations, which Barclays noted was largely driven by Azure unit outperformance.
As of the writing, MSFT shares were up nearly 9% and were among the top trending tickers on Stocktwits.
Barclays Saw No Negative Surprises In MSFT’s Q4
The firm said investors are expected to revisit the company’s shares as it reported better Azure and Office growth during the quarter, according to TheFly. Azure unit revenue saw 43% growth in the fourth quarter (Q4), higher than the 40% growth it saw during the same period last year, and crossed $100 billion for the first time in fiscal year 2026.
Barclays stated that Microsoft had no negative surprises on its capex outlook and free cash flow targets. In the company’s report, the calendar 2026 capital expenditure forecast was now calculated at about $175 billion from roughly $190 billion, after Microsoft extended the estimated useful life of its data centers and office buildings to 25 years from 15 years.
Morningstar Views Azure As A Long-Term Positive
Morningstar cheered the Azure strength, which it expects in both traditional and artificial intelligence workloads going into the company’s fiscal first quarter (Q1). It also said near-term demand indicators for the company remain robust.
“Results are good overall, as Azure growth and all three segments beat the high end of guidance,” said analyst Dan Romanoff. “Demand for Azure AI services is surging, which is a clear long-term positive.”
Bernstein noted that Azure’s growth and acceleration potential is reflected in the results and guidance, and that the company is proving to be an AI winner with strong downside protection and further improvement ahead, TheFly reported. Citi, Piper Sandler, and Wells Fargo also praised the company for strong metrics under Azure and Copilot segments.
For Q4, the company’s revenue rose 18% to $90 billion, ahead of the Fiscal AI consensus estimate of $87.7 billion. Adjusted earnings per share were $4.81, much ahead of the $4.24 consensus estimate. For Q1 2027, revenue is expected to come between $89.85 billion and $90.95 billion, and Azure growth of 45% on a constant currency basis.
UK Probe Unveiled
On Thursday, the U.K.’s Competition and Markets Authority said it is investigating whether the company has breached consumer protection law after making changes to its Microsoft 365 Personal and Family subscriptions.
“The CMA is investigating Microsoft over concerns that customers may not have been given clear information upfront about subscription options when changes were made to Microsoft 365 Personal and Family plans – including adding new features such as Copilot. The CMA is looking into whether Microsoft’s communications with customers before renewal were misleading,” according to the U.K. regulator statement.
What Retail Traders Think About MSFT
On Stocktwits, the retail sentiment toward the stock turned ‘extremely bullish’ from ‘neutral’ over the last 24 hours.
One user on the platform said, “Azure growth shows AI is actually printing money.”
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Another user said, “Azure cloud growth will continue to grow at an exponential rate like it has for the past decade.”
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MSFT stock is down 19% so far this year and has fallen roughly 24% over the past 12 months, underperforming the S&P 500.
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