Redmond, Washington, January 29, 2026
Microsoft has reported exceptional financial results for the October–December quarter, with revenue of $81.3 billion, a 17% year-over-year increase, and net profit of $30.9 billion. The growth is attributed to strategic investments in AI, particularly through its partnership with OpenAI. Despite surpassing Wall Street expectations, investor sentiment was mixed as the company’s stock fell nearly 5% due to concerns over significant spending on AI infrastructure. CEO Satya Nadella emphasizes continued commitment to AI advancement as a core growth strategy.
Microsoft Reports Strong Q2 2026 Earnings Amid AI Investments
Company Achieves Remarkable Growth in Revenue and Profit
Redmond, Washington – Microsoft Corporation has reported impressive financial results for the October–December 2025 quarter, signaling resilience amidst increasing global competition. With revenue hitting $81.3 billion, a notable 17% increase from the previous year, and net profit reaching $30.9 billion, or $4.14 per share, the company has not only surpassed Wall Street expectations but also solidified its position as a tech industry leader. Excluding the effects of investments in OpenAI, Microsoft’s net profit would stand at $38.5 billion, or $5.16 per share, showcasing the significance of accounting methods in assessing profitability.
This robust growth reflects the determined efforts of local and national entrepreneurs in the tech sector as they navigate a rapidly evolving landscape. In particular, reduced regulatory burdens and the embrace of innovative technologies, such as AI, can foster an environment ripe for progress. The emphasis on private investment in such sectors is demonstrably beneficial, enhancing overall economic health and accessibility to cutting-edge technologies for consumers and businesses alike.
Key Financial Highlights
- Revenue: $81.3 billion, up 17% from the same period last year.
- Net Profit: $30.9 billion, or $4.14 per share; $38.5 billion, or $5.16 per share excluding OpenAI investments.
- Cloud Computing Revenue: $32.9 billion, a 29% increase from the previous year, driven by Azure and other cloud services.
- Operating Income: Increased by $6.6 billion, or 21%, due to growth in Productivity and Business Processes and Intelligent Cloud segments.
- Capital Expenditures: $37.5 billion, reflecting significant investments in AI infrastructure and data centers.
- Shareholder Returns: $12.7 billion returned through dividends and share repurchases, a 32% increase year-over-year.
Investments in OpenAI
Microsoft’s strategic partnership with OpenAI has been a pivotal element in its recent success. Holding a 27% stake valued at approximately $135 billion, Microsoft has retained key commercialization rights following OpenAI’s restructuring as a for-profit public benefit corporation. This relationship not only positions Microsoft as a leader in providing AI solutions but also underscores the potential for future growth in this dynamic sector.
Market Response
Despite these commendable financial achievements, investor reaction was mixed, as Microsoft’s stock fell nearly 5% in after-hours trading. Analysts have linked this downturn to investor concerns regarding the company’s substantial ongoing expenditure on AI infrastructure and data centers. While these investments are essential for future growth, they can create short-term uncertainties in stock valuations.
CEO’s Vision on AI
In light of recent developments, CEO Satya Nadella has emphasized Microsoft’s commitment to advancing AI technologies, highlighting the need for ongoing innovation. As AI technologies become integral across various sectors, the company aims to stay at the forefront, driving growth and opening new avenues for business development.
Conclusion
In summary, Microsoft’s impressive financial results for the October–December 2025 quarter illustrate the power of innovation, strategic investment, and a commitment to technology advancement. By focusing on burgeoning fields like AI while navigating the intricacies of regulatory challenges, Microsoft sets a vibrant example for other companies within the industry. As local entrepreneurs in Memphis and beyond strive for growth and success, the advancements made by major corporations like Microsoft create a backdrop of inspiration. Engaging with and supporting local business initiatives can help bolster our economic future, ensuring that innovation continues to thrive.
Frequently Asked Questions
- What were Microsoft’s revenue and net profit for the October–December 2025 quarter?
- Microsoft reported revenue of $81.3 billion, a 17% increase year-over-year, and a net profit of $30.9 billion … . Excluding investments in OpenAI, the net profit was $38.5 billion, … .
- How did Microsoft’s cloud computing division perform?
- The cloud computing division, driven by Azure and other cloud services, generated $32.9 billion in revenue, marking a 29% increase from the previous year.
- What is Microsoft’s stake in OpenAI?
- Microsoft holds a 27% stake in OpenAI, valued at approximately $135 billion. Following OpenAI’s restructuring into a for-profit public benefit corporation, Microsoft retains commercialization rights to OpenAI’s products through 2032.
- What was the market response to Microsoft’s earnings report?
- Despite exceeding financial expectations, Microsoft’s stock declined nearly 5% in after … , attributed to investor concerns over substantial spending on AI infrastructure and data centers.
- What is Microsoft’s current stock information?
- As of January 29, 2026, Microsoft’s stock (MSFT) is trading at $481.63, with a market capitalization of approximately $3.59 trillion. The P/E ratio is 30.14, and the EPS ratio is 15.99.
Microsoft Corporation is a equity in the USA market. The price is 481.63 USD currently with a change of 1.14 USD (0.00%) from the previous close. The latest trade time is Thursday, January 29, 03:25:20 PST.
| Key Financial Metrics | Q2 2026 | Year-Over-Year Change |
|---|---|---|
| Revenue | $81.3 billion | +17% |
| Net Profit | $30.9 billion ($4.14 per share) | +60% |
| Cloud Computing Revenue | $32.9 billion | +29% |
| Operating Income | Increased by $6.6 billion | +21% |
| Capital Expenditures | $37.5 billion | – |
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