Microsoft delivered a strong financial performance in its fiscal second quarter, posting revenue of about $81.3 billion for the period ending December 31, 2025. That marked roughly 17 percent growth from a year earlier and came in above market expectations.
Adjusted earnings per share reached $4.14, also beating analyst forecasts. The results reflected continued demand across Microsoft’s core businesses, especially cloud services.
Cloud Performance Remains a Key Driver
Microsoft Cloud revenue crossed the $50 billion mark in the quarter, supported by steady enterprise adoption and expanding AI workloads. Azure and related cloud services reported year-over-year growth of around 38 to 39 percent on a constant-currency basis.
Key Highlights from the Quarter Include:
- Strong Azure and cloud services demand
- Enterprise customers increasing AI-related workloads
- Stable commercial booking trends
Spending Surge Raises Investor Questions
Despite the earnings beat, investor focus quickly shifted to costs. Capital expenditures jumped to roughly $37.5 billion, up about 66 percent from the prior year, largely due to investments in AI chips and data center capacity.
Microsoft’s latest results reinforce the market’s confidence in its AI-led growth strategy, even as capital spending rises. Aggressive cloud and infrastructure investments continue to shape investor expectations, a trajectory that has already pushed the company toward a historic milestone, as seen when Microsoft neared a $4 trillion valuation driven by cloud and AI growth. The market has consistently rewarded this long-term approach despite short-term cost concerns
| Metric | Q2 FY2026 Result |
| Revenue | $81.3B |
| Adjusted EPS | $4.14 |
| Cloud Revenue | $50B+ |
| Capital Expenditures | $37.5B |
Microsoft shares slipped in after-hours trading as some investors questioned whether near-term returns would justify the scale of AI infrastructure spending. While cloud growth remained strong, the lack of clear acceleration added to cautious sentiment.
The earnings report reinforced Microsoft’s long-term commitment to AI and cloud expansion, even as markets weigh the cost of that ambition.
