Microsoft Corporation (MSFT) reported a significant decline of 28.6% in its stock price over the past six months, compared to a 7.9% decline in the Zacks Computer and Technology sector. Despite these challenges, the company continues to show solid growth in its cloud services, with the Intelligent Cloud segment generating $32.9 billion in revenue in Q2 of fiscal 2026, marking a nearly 29% year-over-year increase.
During the same quarter, Azure revenues grew by 39%, primarily driven by enterprise demand for cloud infrastructure and AI solutions. Even with a projected revenue growth forecast for Azure of 37% to 38% in Q3, Microsoft is facing supply constraints expected to last until fiscal year-end. The company also reported total revenues of $81.3 billion for Q2, a 17% increase from the previous year, and a non-GAAP diluted earnings per share (EPS) of $4.14, exceeding estimates by 6.7%.
Looking ahead, Microsoft expects to continue its growth trajectory despite near-term risks, including pressure on gross margins due to rising AI infrastructure costs. The company is guidance for Q3 revenues between $80.65 billion and $81.75 billion, indicating a forecasted annual growth rate of about 15% to 17%.
