Microsoft reported stronger-than-expected fiscal first-quarter results on Wednesday, with profit and revenue beating Wall Street estimates as surging demand for artificial-intelligence cloud services drove Azure growth above 30%. The company's shares rose in after-hours trading.

The Redmond, Washington-based company has staked its growth on AI infrastructure, pouring tens of billions of dollars into data centres to meet enterprise demand for its Azure cloud platform and Copilot assistants. Chief Executive Satya Nadella has repeatedly told investors that AI capacity constraints, not demand, remain the main limit on cloud growth.

Intelligent Cloud, the segment housing Azure, led revenue gains, while the Productivity and Business Processes unit benefited from Copilot adoption across Microsoft 365. Chief Financial Officer Amy Hood addressed the quarter's capital expenditure, which analysts at Morgan Stanley projected would exceed $35bn as the company expands data-centre capacity.

The results reinforced the market narrative that AI spending continues to lift the largest US technology firms, following record AI-driven earnings at TSMC and Dell earlier in 2026. Investors scrutinised Microsoft's guidance for signs that heavy capital outlays would weigh on margins in coming quarters.

"Demand for our AI and cloud offerings continues to outpace available capacity," Nadella said on the earnings call, reiterating the company's commitment to expanding its global data-centre footprint.