Microsoft’s AI Revenue Growth Surges
Microsoft (NASDAQ: MSFT) has reported a remarkable shift towards AI, with its AI-related revenue now reaching an annual run rate of $37 billion, a 123% increase from the previous year. The company’s fiscal 2026 figures show total revenue at $331.8 billion, an 18% rise, while operating income grew by 21% to $155.2 billion. Azure revenue exceeded $100 billion, reflecting a robust 43% quarterly increase.
Adoption of the Microsoft 365 Copilot has also accelerated, with paid seats surpassing 30 million after initially starting from a small base among over 450 million users. The rising demand for enterprise AI is projected to create a durable revenue stream for Microsoft, despite anticipated AI-related expenditures of approximately $120 billion in fiscal 2026.
Analysts maintain a strong consensus on the stock, with a median price target of $569, indicating an upside of 17% from current levels. The outlook suggests Microsoft is positioned not just as a traditional software company but as a leader in AI infrastructure.
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