Microsoft said its cloud business is accelerating, with Azure growth reaching 48% in the most recent quarter, rising from 42% in the prior quarter. The company also guided for around 49% growth next quarter, according to commentary included in a market update shared by etoro ahead of the earnings season.
The release states that Microsoft put a revenue figure on the Azure business for the first time at USD$33 billion for the quarter. It adds that Azure reached the 48% growth rate despite some third-party data centre capacity arriving later than planned.
Why Azure’s growth is being seen as key
Josh Gilbert, Lead Analyst Middle East at etoro, said Azure growth would be the metric most closely tied to how the results were interpreted by investors. In his view, Azure is “the clearest evidence yet” that Microsoft’s AI build-out is translating into revenue.
Gilbert also suggested that capacity has become a central point of competition among large cloud providers, and that Microsoft is scaling infrastructure faster than markets expected.
Capex timing and management explanation
The update says Microsoft’s capital expenditure, or capex, came in roughly USD$6.5 billion below street estimates. It characterizes this as an important consideration for investors given prior concerns about AI-related spending outpacing revenue.
According to the release, CFO Amy Hood attributed the capex shortfall to delayed capacity deliveries. The update frames this as a timing issue rather than evidence of restraint, and adds that spending could increase again once the delayed capacity is in place.
What analysts are watching next
For the next quarter, Microsoft’s guidance for growth of around 49% is presented as indication that the acceleration may not have peaked. The release further argues that the market focus is shifting from how much companies are spending on AI to whether that spending shows up in business results.
The Microsoft and etoro figures and interpretations are presented as part of the market update and attributed analyst commentary. The release does not include additional company documentation beyond the statements summarized above.
