Microsoft climbs to $4 trillion in after-hours trading on blowout earnings
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"In our largest quarter of the year, we significantly exceeded expectations," CEO Satya Nadella said.
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July 31, 2025
12:18 AM
Fortune
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·MicrosoftMicrosoft climbs to $4 trillion in after-hours trading on blowout earningsBy Nick LichtenbergBy Nick LichtenbergFortune Intelligence EditorNick LichtenbergFortune Intelligence EditorNick Lichtenberg is Fortune Intelligence editor and was formerly Fortune's executive editor of global news.SEE FULL BIO Microsoft CEO Satya Nadella.Ethan Miller/Getty ImagesMicrosoft dered a blockbuster quarter to close its 2025 fiscal year, riding the wave of surging demand for cloud and AI services and sending its stock to new heights in after-hours trading
For the quarter June 30, 2025, Microsoft reported revenue of $76.4 billion, an 18% jump over the previous year
Net income climbed even more swiftly, up 24% to $27.2 billion
Earnings per reached $3.65, outpacing analyst estimates of $3.37. “In our largest quarter of the year,” CEO Satya Nadella told analysts on the subsequent earnings call, “we significantly exceeded expectations.” Investors responded decisively to the upbeat results and bullish AI outlook
Microsoft’s s spiked over 7% in after-hours trading, pushing the stock toward record highs and lifting Microsoft’s market capitalization past the $4 trillion mark—cementing its place as one of just two companies to reach that level globally, along with Nvidia
The reaction underscored Wall Street’s confidence in Microsoft’s strategy, particularly its aggressive investments in cloud infrastructure and its push to commercialize AI tools such as Copilot across its ductivity and developer platforms
Nadella was emphatic in the earnings press release: “Cloud and AI is the driving force of transformation across every industry and sector
We’re innovating across the stack to help customers adapt and grow in this new era.” On the subsequent earnings call, one analyst expressed surprise at the size of the results. “Satya, back to the strength across the board in the quarter… It’s just the magnitude of upside that has shocked many here.” To that point, the company’s Intelligent Cloud segment— to Azure—generated $29.9 billion in revenue, up a robust 26%
Azure and other cloud services revenue soared 39% for the quarter, while annual Azure revenue surpassed $75 billion, growing 34% year-over-year
Nadella cited major enterprise customers leveraging both traditional and AI-powered workloads on Azure, highlighting that this is no longer just experimentation—companies are moving quickly to deploy AI at scale
Nadella claimed on the analyst call that “we continue to lead the AI infrastructure wave and gained market every quarter this year,” noting that Microsoft operates more data centers than any other cloud vider, having opened new facilities across six continents
He said it operates over 400 data centers across 70 regions
Strength across the board The ductivity and cesses segment, anchored by Microsoft 365 and LinkedIn, generated $33.1 billion (+16%), and More Personal Computing brought in $13.5 billion (+9%), bolstered by a rebound in devices demand and rising Xbox content revenue
Throughout fiscal 2025, Microsoft amassed $281.7 billion in revenue (+15%) and $101.8 billion in net income (+16%)
The company also returned $9.4 billion to holders in the fourth quarter through dividends and buybacks
CFO Amy Hood emphasized Microsoft’s operational discipline and the scaling of AI investments, and revealed on the earnings call that the company expects over $30 billion of capital expenditure for the first quarter of 2026, “driven by the continued strong demand signals we see
When asked the return on investment on this massive spending, Hood responded that Microsoft has $368 billion of contracted backlog across the “breadth of the Microsoft Cloud,” not just Azure
She added that she feels very confident that this spending is “directly tied to that is already contracted and on the books — and that we need to der.” Hood also reassured employees and investors of the company’s forward momentum, noting in an internal post-earnings memo, as reported by Insider, that “FY26 will require intensity, clarity, and bold execution,” reflecting both the opportunities and competitive pressures ahead as Microsoft doubles down on AI and security priorities
For this story, Fortune used generative AI to help with an initial draft
An editor verified the accuracy of the information before publishing
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