Microsoft shares surged nearly 9% in extended trading after the software giant reported stronger-than-expected Q4 earnings and Azure cloud growth. Robust AI-driven demand, upbeat guidance and lower-than-expected capital expenditure expectations reassured investors that Microsoft's heavy investments in artificial intelligence are beginning to deliver meaningful financial returns.

Microsoft’s Azure grew 43% and passed $100bn for the year, its backlog hit $678bn, and the stock rose 2%. But AI capital spending keeps climbing.

July 29 : Microsoft on Wednesday said it expects to keep generating cash through its just-started fiscal 2027 and gave a capital expenditure forecast below Wall Street estimates…