TLDR
- Microsoft shares fall 1.66% to $524.10 after reversing an early rally above $532
- Microsoft spends $115.95 billion on property and equipment during fiscal 2026
- Azure annual revenue tops $100 billion as quarterly cloud services growth hits 43%
- Microsoft’s cloud backlog climbs 84% to $678 billion as customer commitments grow
- Microsoft raises its quarterly dividend to $0.98, with payment due December 10
Microsoft shares traded at $524.10 on Thursday, down 1.66%, and the company continued its large AI infrastructure expansion. The stock lost $8.85 and reversed an early climb above $532. Meanwhile, Microsoft’s latest results showed rising cloud sales, higher capital spending, and continued shareholder payments.
Microsoft Expands Infrastructure Spending
Microsoft paid $115.95 billion for property and equipment during fiscal 2026, compared with $64.55 billion a year earlier. Those cash payments supported its growing network of facilities and computing equipment. Finance leases added further investment beyond the cash spending reported in that figure.
Total fourth quarter capital expenditures reached $41 billion, including assets acquired through finance leases. About two-thirds covered shorter-lived equipment, mainly central processors and graphics chips. Microsoft directed the remaining spending toward longer-lived assets, including large data center sites.
Management forecast capital spending above $50 billion in the first quarter of fiscal 2027. That projection included lease reclassification following changes to the estimated useful lives of certain assets. The company continues to expand capacity for cloud computing and artificial intelligence services for enterprise customers.
Azure Revenue and Cloud Backlog Grow
Azure generated more than $100 billion in annual revenue for the first time during fiscal 2026. Azure and other cloud services increased fourth-quarter revenue by 43%. Microsoft Cloud recorded quarterly revenue of $59.3 billion, up 27% from the previous year.
Commercial remaining performance obligations climbed 84% to $678 billion at the end of the fiscal year. This measure covers contracted revenue, including amounts Microsoft expects to recognize in later periods. However, the backlog grew 25% after excluding commitments from OpenAI.
Microsoft 365 Copilot also reached more than 30 million paid seats across its customer base. The product brings AI features into Microsoft’s existing business software subscriptions across several workplace applications. Customers outside leading model companies contributed nearly 90% of annual Microsoft Cloud revenue.
Cash Flow Supports Dividends and Expansion
Operating cash flow increased 30% to $55.4 billion during the fourth quarter, supported by cloud billings and collections. However, cash spending on property and equipment left free cash flow at $19.6 billion. Microsoft also returned $10.2 billion through quarterly dividends and share repurchases.
In September, the board increased the quarterly dividend by seven cents to $0.98 per share. Microsoft will distribute that payment on December 10, 2026. The company set November 19 as both the shareholder record date and the ex-dividend date.
Annual revenue increased 18% to $331.8 billion during the fiscal year ending June 30, 2026. Operating income also rose 21% to $155.2 billion during that reporting period. Microsoft plans to release its next quarterly earnings on October 28, 2026.
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