Microsoft reported fiscal first-quarter 2027 results (three months ending Sept. 30, 2026): revenue rose 19% to $92.3 billion and adjusted EPS grew 18%, while the stock barely moved. Azure revenue grew 48%, beating the company's 44% to 45% constant-currency forecast, even though some third-party data center capacity arrived late. However, capital expenditures reached $45.2 billion, free cash flow fell about 27% to $18.6 billion, and Microsoft Cloud's gross margin dipped to 66%. For the next quarter, management expects Azure growth of 49% to 50% and capex above $50 billion. The author grades Azure an A, spending and margins a C+, and the outlook a B+; with shares near $530, about 29 times adjusted earnings, the author feels the stock already reflects most of the good news and wants a lower price.
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MSFTearningscloud computingdata centersvaluation
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Related tickers and likely impact
MSFT
• NeutralMicrosoft
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Systems Software |
| Market cap | $3.9T |
| Close on 10/30/2026 | 521.90 |
| Change that session | -1.55% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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