Microsoft’s Azure AI services continue to gain traction, with a 39% year-over-year revenue increase in Q2 of fiscal 2026, driving the Intelligent Cloud segment to $32.9 billion. This growth is bolstered by the launch of Microsoft Foundry, its unified AI development platform, which now supports REST API v1, and enhancements to its Sovereign Cloud platform that cater to regulated industries. Microsoft 365 Copilot also reached 15 million paid seats, reflecting a more than 160% annual growth, with over 80% of Fortune 500 companies using active agents built on its platform.
Despite this progress, the company faces supply challenges, as demand is outpacing available capacity. In response, Microsoft added nearly one gigawatt of infrastructure in the quarter, with Azure expected to see growth of 37% to 38% in the next quarter. The Zacks Consensus Estimate for Microsoft’s fiscal 2026 earnings stands at $16.97 per share, projecting a year-over-year growth of 24.41%.
In comparison, Amazon’s AWS reported revenues of $35.6 billion in Q4 2025, marking a 24% increase, while Google’s Cloud business recorded $17.7 billion in revenues, up 48% year-over-year. Microsoft’s share price has declined by 19% over the past six months, underperforming the overall tech sector while the forward P/S ratio stands at 8.45, compared to the industry’s 7.11.
