7 Microsoft Q2 2026 Financial Report Key Facts

Jakarta, Pintu News – Microsoft reported strong financial results for the second quarter of fiscal 2026, with revenue of USD 81.3 billion which was a 17 % increase on an annualized basis. This exceeded market expectations, but the market reaction to Microsoft’s stock suggests uncertainty regarding the rate of return from its large investments in artificial intelligence (AI) and cloud infrastructure. This is important for tech investors and the capital markets at large to understand.

1. Year-on-Year Revenue Growth

Microsoft recorded revenue of USD 81.3 billion for Q2 of fiscal 2026, up about 17% over the same period the previous year. This growth slightly exceeded analysts’ expectations of around USD 80.3 billion. The figure reflects strong demand, particularly in the cloud and enterprise services divisions.

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2. Profit and the New Accounting Methodology

The company’s net income was significant, reaching a higher figure when accounting for changes in reporting related to the investment in OpenAI. Under the new accounting approach, reported net income reached USD 38.5 billion, whereas under the traditional methodology it was around USD 30.9 billion. This change reflects the major impact of Microsoft’s ownership structure and strategic collaboration with AI developers.

3. Cloud and Azure Growth

Microsoft’s cloud division remains a growth engine, with revenue from Microsoft Cloud surpassing USD 50 billion this quarter. Azure services, an integral part of the cloud segment, grew significantly by around 39 %, surpassing most analysts’ predictions. Cloud computing continues to be a key driver of revenue and medium-term profitability for the company.

4. AI’s Massive Capital Expenditure (CapEx)

Microsoft is massively increasing its capital expenditure, with a capex of around USD 37.5 billion, up about 66% from the previous year. Much of this spending was directed at data center infrastructure and chipsets to support its growing AI and cloud services. While this investment reflects a long-term commitment to AI technology, it has also sparked investor concerns about future returns.

5. Market Reaction to Reports

Despite revenue and profit topping estimates, Microsoft shares fell in after-hours trading, reflecting investors’ concerns over big spending and the potential for slowing cloud growth.

The share price decline is expected to range from 4% to 7% in the after-hours market. Investors seem to think that the AI expansion needs to start showing clearer financial results to justify the very high costs.

6. Reliance on AI and Cloud Backlog

Financial reports show that nearly 45 % of Microsoft’s cloud contract backlog is directly related to OpenAI, underscoring the strong reliance on this partnership for future growth.

The overall cloud backlog, which reflects the value of outstanding contracts, increased significantly and indicates strong demand. Dependence on one large partner such as OpenAI is also considered to pose certain business risks in the context of competition with other AI providers.

7. Long-term Strategic Focus

CEO Satya Nadella emphasized that AI is still at an early stage of widespread adoption, and large investments are needed to sustain long-term growth across Microsoft’s product portfolio.

Microsoft intends to expand AI services through platforms such as Microsoft 365 Copilot and Azure, and increase sales across all cloud and enterprise software segments. This strategy reflects the company’s view that excellence in AI technology will be a key driver of its competitiveness in the coming decade.

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Reference
– Cryptopolitan. Microsoft Q2 Revenue Rises 17% to $81.3B. Accessed January 29, 2026.