Microsoft Beats Q2 Cloud and Sales Forecasts, Shares Surge >5%

Microsoft announced that its fiscal second‑quarter Azure cloud growth will reach 49‑50%, topping the 47.6% estimate from analysts, and that total sales will hit $96‑$97.1 billion, above the $95.6 billion forecast. The company posted $18.6 billion in free cash flow for the first quarter, $10 billion more than expected, and Azure revenue rose to $33.17 billion, beating estimates of $32.84 billion. After the announcement, Microsoft shares climbed more than 5% in after‑hours trading, adding to a 9% year‑to‑date gain. The results underscore the return on Microsoft’s heavy AI investment, contrasting with Alphabet and Meta, whose AI‑driven capital spending has squeezed free cash flow and pushed shares lower. Microsoft is expanding lower‑cost AI models and the new Copilot Cowork agent to meet corporate demand, reinforcing its position as a leading AI‑enabled cloud provider.