Shares of Microsoft (MSFT -0.52%) were moving higher today as the tech giant delivered a strong fiscal fourth-quarter earnings report across the board. The results were driven by growth in all three of its core business segments, and particular strength in its Azure cloud infrastructure segment, a sign that its artificial intelligence (AI) strategy is paying off.
As of 9:49 a.m. ET, the stock was up 5.2%, topping $4 trillion in market cap for the first time.
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The AI boom continues
Overall revenue in the quarter was up 18% to $76.4 billion, which topped expectations at $73.8 billion.
Growth was well balanced. Revenue from productivity and business process, which includes the Microsoft 365 Office suite, was up 16% to $33.1 billion. Intelligent cloud, which includes Azure, posted 26% revenue growth to $29.9 billion, and more personal computing, which includes Windows, rose 9% to $13.5 billion.
In addition to strong growth in enterprise software and AI-focused products, Microsoft's consumer-focused franchises also did well with Xbox revenue up 13% and LinkedIn revenue up 9%. Search and news advertising revenue grew 20%, outperforming Google, though Microsoft's search business is much smaller.
Microsoft's margins continued to scale up with operating income growing 23% to $34.3 billion, and earnings per share up 24% to $3.65, ahead of the consensus at $3.38.
CEO Satya Nadella said, "Cloud and AI is the driving force of business transformation across every industry and sector. We're innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75 billion in revenue, up 34%, driven by growth across all workloads."
Can anything stop Microsoft?
Compared to its big tech peers, Microsoft benefits from having an unmatched level of diversification in its business, ranging from enterprise software to cloud infrastructure to Windows to consumer products, including devices and social media through LinkedIn.
That's given Microsoft an edge in leveraging its investments in AI as it can deploy the technology across a broad range of products.
The company says it expects revenue to grow double digits in fiscal 2026, and it sees strong growth continuing in its cloud business.
Microsoft stock trades at a premium, but the recent results show why. The company remains in the driver's seat as the AI era advances and looks poised for further gains.
