Microsoft reported fiscal Q4 2026 earnings on July 29 with revenue of $90 billion and earnings per share of $4.81, buoyed by a $3.2 billion gain from its Anthropic stake.

The real story was Azure. Annual Azure revenue surpassed $100 billion for the first time. Cloud revenue for the quarter reached $59.3 billion, up 27% year-over-year.

AI Is Paying Off

Microsoft’s investment in AI infrastructure and partnerships is translating to real revenue. The company had hedged its bets on multiple AI companies—OpenAI, Anthropic, and others—and that strategy is working.

The $3.2 billion Anthropic gain alone added 33 cents per share to earnings. That’s not a rounding error. That’s material.

The Cloud War Heats Up

Azure growth is strong, but AWS remains Microsoft’s primary competitor. Amazon reports earnings on July 30. The two are racing to serve enterprises that want to run AI models on cloud infrastructure.

Microsoft also disclosed that it’s shopping for additional computing capacity outside its own data centers, evaluating options from Amazon and Google. The computing shortage is real. Demand for AI infrastructure outpaces supply.

Market Reality

Despite strong numbers, tech stocks have struggled. Investors worry about valuations and whether AI spending will deliver returns. Microsoft earnings beat expectations, but the stock didn’t surge—a sign that investor patience with the AI boom is wearing thin.

Microsoft is executing well. The question haunting the market is whether the whole industry is overpaying for AI infrastructure.