Microsoft Beats Q1 Earnings Despite Stock Drop on Higher Capital Spending Forecast and $3.1B OpenAI Hit
Summary
Microsoft crushes Q1 earnings with $77.67 billion revenue and 40% Azure growth, but stock tumbles 4% as company forecasts accelerated capital spending and absorbs a massive $3.1 billion OpenAI investment hit despite maintaining its $135 billion stake in the AI giant.
Key Points
- Microsoft reports Q1 2026 earnings that beat expectations with $77.67 billion in revenue and $3.72 earnings per share, driven by 40% growth in Azure cloud business
- Stock drops nearly 4% in extended trading after CFO Amy Hood forecasts accelerated capital expenditure growth for fiscal 2026, higher than previously expected
- Company takes a $3.1 billion hit to net income from OpenAI investment while maintaining its 27% stake worth approximately $135 billion in the restructured AI company