REDMOND, Washington — Microsoft on Tuesday reported record fiscal first-quarter revenue, with its Azure cloud division growing more than 35% year over year as enterprise demand for artificial-intelligence services accelerated. The results exceeded analyst forecasts compiled by LSEG.

The company, reporting results for the quarter ended September 30, highlighted continued momentum in its Intelligent Cloud segment, which houses Azure. Chief Executive Satya Nadella has repeatedly tied Microsoft's growth to AI adoption across its Copilot product line and partnership with OpenAI.

Capital spending remained a central theme, with Microsoft pouring tens of billions of dollars into data centres and Nvidia-powered chips to meet demand. The company has warned investors that capacity constraints continue to limit how quickly it can bring new AI workloads online. Chief Financial Officer Amy Hood addressed capital expenditure on the earnings call.

Investors scrutinised the figures for signs that heavy AI infrastructure investment is translating into durable revenue, after months of debate over whether cloud providers can earn adequate returns on the spending. Microsoft's commercial bookings and remaining performance obligations were watched closely as indicators of future demand.

"Cloud and AI are the driving force of business transformation across every industry," Nadella said in the company's statement, pointing to expanding Copilot deployments among large enterprise customers.