Microsoft posts 43% Azure growth, holds capex steady at $175B; adds 31 data centers

Microsoft reported fiscal Q4 2026 revenue of $90 billion, beating LSEG consensus of $87.6B, with Azure cloud growth accelerating to 43% year-over-year on constant-currency basis—ahead of FactSet's 40.26% forecast. The company added 31 new data centers across five continents during the quarter, bringing its total to 88 globally, and maintained its full-year 2026 capex guidance at $175 billion despite wider industry moves to raise spending forecasts quarterly.

The standout signal: Microsoft reaffirmed capex discipline. While Alphabet hiked its top-end guidance to $205B and Meta bumped its range to $130B–$145B, Microsoft held steady at $175B, an accounting shift notwithstanding. CFO Amy Hood guided Q1 FY2027 Azure growth to 45% in constant currency, well above street expectations of 42%. The company deployed $41 billion in capex during the quarter alone, up 70% year-over-year, but showed it can generate profitable scale: free cash flow hit $19 billion in the quarter, versus Meta's $1.7B and Alphabet's negative FCF.

The efficiency gains matter: Microsoft also showed improved unit economics beyond cloud. M365 Copilot reached over 30 million paid seats, up from 20M three months ago. The company's RPO (remaining performance obligation) grew $51 billion sequentially, driven by customer commitments outside frontier AI model developers—a signal that AI spending is broadening beyond labs like OpenAI and Anthropic. Satya Nadella teased a Copilot 'super app' later this quarter. Investors rewarded discipline: shares rallied 9% after-hours as the market reversed months of bearish sentiment on Microsoft's AI positioning.