Microsoft beat fourth-quarter sales and profit expectations, with its Azure cloud posting 43% growth.
- Microsoft lowered its calendar 2026 capital-expenditure forecast to about $175 billion from roughly $190 billion due to an accounting change.
- The company said if cloud demand trends change, it will adjust its purchase of servers.
- Stocktwits sentiment for MSFT shifted to ‘extremely bullish’ from ‘neutral.’
Microsoft Corp.’s stock (MSFT) gained 7% in overnight trading late Wednesday after the company reported fiscal fourth-quarter results and the first quarter 2027 forecast higher than expectations.
Still, one of the biggest takeaways from the report was that Microsoft kept its 2026 capital expenditures forecast unchanged, even as Alphabet raised its target last week.
Microsoft also dismissed the growing narrative that hyperscalers are building cloud capacity that might become excess in the future and discussed several levers it has at its disposal should cloud demand waver.
“If the demand environment changes, you just slow down what is, in fact, the largest component, right, and the driver of COGS (cost of goods sold),” Microsoft CFO Amy Hood said on the company’s earnings call.
“The investment into land and data center builds is actually quite flexible, right? It’s a smaller percentage of the overall cost structure. And [the] timing can be changed on much of that, especially on the build, or you can stagger the timing of the build-out of, as I was saying, some of the GPUs and CPUs that you plan to put in.”
Hood added that Microsoft has “a big first-party app business that also uses the capacity that you’re building out in addition to your Azure platform. It does allow us to have a lot more flexibility to manage through those.”
Accounting Change To CapEx Estimates
Notably, Microsoft lowered its calendar 2026 capital-expenditure forecast to about $175 billion from roughly $190 billion, after extending the estimated useful life of its data centers and office buildings to 25 years from 15 years.
The accounting change will cause more future data-center leases to be classified as operating leases, which are excluded from capex, and the company’s underlying investment plans remain unchanged, Hood said.
Hyperscalers including Amazon, Alphabet and Meta Platforms have earmarked record levels of spending for new data centers this year, saying the investments are essential to meet the surging compute demand from AI applications. Alphabet’s cloud business posted a record 82% revenue growth last quarter, while neocloud providers such as CoreWeave have expanded rapidly over the past year.
Microsoft’s Q4 Recap
Microsoft’s total revenue climbed 18% to $90 billion last quarter, beating analysts’ estimate of $87.7 billion from Fiscal.ai. Azure growth rate in the quarter was 43%, higher than the previous quarter’s 40% growth rate, and CEO Satya Nadella said the business surpassed $100 billion for the first time in fiscal year 2026,
Adjusted profit was $4.81 per share, also higher than analysts’ target of $4.24 per share.
Microsoft forecast a fiscal 2027 first-quarter sales range with a midpoint of $90.4 billion, above estimates of $89.66 billion from LSEG/Reuters. The company forecast Azure growth of 45% on a constant currency basis, well above analyst estimates of 40.92% from Visible Alpha.
Retail And Analysts’ View On MSFT
Microsoft was among the top trending tickers on Stocktwits late Wednesday. The retail sentiment for the stock flipped to ‘extremely bullish’ from ‘neutral’ and message volume rose over 360% in the last 24 hours.
$SPY $MSFT didn’t run with semi trade, but now semi getting pump off msft that’s been treated like a software trade .. I’m not complaining but make it make sense,” a trader said.
Another wrote that “$MSFT [is] is the most undervalued mag7 stock.” CNBC analyst Jim Cramer wrote that he was the report was a “tour de force,” and
As of their last close, MSFT stock is down 19% year to date.
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