Is Microsoft a Buy as Cloud Revenue Continues to Soar?

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Geoffrey Seiler, The Motley Fool

Mon, May 4, 2026 astatine 10:50 AM CDT 4 min read

Despite Microsoft's (NASDAQ: MSFT) continued beardown operational show implicit the past 2 years, its banal has fundamentally been moving successful place. From the extremity of April 2024 to the extremity of April 2026, the banal is up lone astir 1%. The company's dense reliance connected OpenAI successful its unreality business, unneurotic with getting thrown into the software-as-a-service (SaaS) loser bucket, has hindered its stock.

Let's dip into its fiscal Q3 results to spot if the banal has the imaginable to yet interruption retired from here.

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Azure continues to radiance

Microsoft's unreality computing unit, Azure, erstwhile again shone, with gross surging 40% (39% successful changeless currencies). It was the 11th consecutive 4th that Azure gross has risen by 30% oregon more, arsenic request for compute powerfulness and artificial quality (AI) services continues to powerfulness results. It noted that request continues to outstrip capacity, portion yearly recurring gross (ARR) for its AI concern soared 123% arsenic customers follow much AI solutions.

Bookings fell 46% successful changeless currencies but were up 26% erstwhile excluding OpenAI. Remaining show obligations (RPOs), which see aboriginal Azure commitments, astir doubled to $627 billion. It said astir a 4th of these commitments volition beryllium recognized arsenic gross implicit the adjacent year.

Microsoft's full gross climbed by 18% twelvemonth implicit twelvemonth to $82.89 billion, with adjusted net per stock (EPS) expanding 21% to $4.27. The results topped the expert statement for $81.39 cardinal successful gross and $4.06 successful adjusted EPS, arsenic compiled by LSEG.

Overall "intelligent cloud" revenue, wherever Azure and GitHub reside, jumped by 30% twelvemonth implicit twelvemonth to $34.7 billion. The institution said GitHub was seeing "unprecedented maturation driven by the proliferation of agentic coding." Meanwhile, it conscionable announced that it would displacement to a usage-based pricing exemplary for GitHub Copilot.

Microsoft's productivity and concern processes segment, location to Microsoft 365 and LinkedIn, saw gross summation 17% twelvemonth implicit twelvemonth to $35 billion. Growth was beardown crossed its 4 main solutions successful the conception (in the table), led by a 33% leap successful Microsoft 365 Consumer unreality revenue, helped by an earlier terms increase. Meanwhile, it said spot additions to Microsoft 365 Copilots skyrocketed 250% to 20 cardinal paid seats.

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