Microsoft is posting record profits and strong cloud growth, but just like Google, the company is saying little about how its generative AI business is actually performing.
Microsoft pulled in $82.89 billion in revenue during its third fiscal quarter (ending in March), up 18 percent year over year. Microsoft Cloud hit $54.5 billion, up 29 percent. Azure led the pack with 40 percent growth (39 percent adjusted for currency), and the company expects that pace to hold through next quarter.
Microsoft 365 Copilot now has more than 20 million paying users, up from 15 million in January. Nadella said Copilot has reached the same weekly usage level as Outlook, which he sees as a sign that AI use is becoming "a habit."
Like Google, Microsoft plans to spend $190 billion on capital expenditures in 2026, well above analyst estimates. Even with that buildout, Nadella said capacity will stay tight at least through the end of 2026.
Next quarter's revenue and margin forecast came in below expectations, and the stock dropped more than 5 percent today. Microsoft, like Google, also won't break out its AI numbers: there's no clear picture of how much of Azure's growth actually comes from AI, how profitable Copilot is on its own, or how much direct revenue OpenAI brings in as a customer.
