Microsoft reports strong revenue growth amid AI investments and European expansion

Microsoft has surpassed Wall Street’s quarterly expectations, driven by robust demand for its cloud computing services. The tech giant reported a 13 per cent increase in overall revenue year-on-year, reaching
70.1 billion . Net income rose by 18 per cent to.
Revenue from Microsoft’s Azure cloud computing platform showed notable growth, rising by 33 per cent during the third quarter of the fiscal year. This performance demonstrated an acceleration from the 31 per cent growth recorded in the previous quarter. Chief Executive Satya Nadella highlighted cloud computing and artificial intelligence as essential drivers for business expansion, enabling firms to reduce costs and increase output. Microsoft’s advancements in AI, including its generative AI tools such as Copilot, continue to position the company as a frontrunner in the sector.

The positive performance resulted in a 6 per cent spike in Microsoft shares, climbing $23.54 to $418.75 in after-hours trading. This eased investor concerns about the company’s multi-billion-dollar commitment to AI expansion and infrastructure. Its Intelligent Cloud unit, which encompasses Azure, saw revenue increase by 21 per cent to $26.8 billion, further solidifying its position as a global leader in cloud computing services.

Microsoft has also doubled down on its European commitments amidst ongoing geopolitical tensions. President Brad Smith announced plans to spend “tens of billions” over the next two years to expand the company’s data centre capacity across the continent. This initiative aims to add 40 per cent to Microsoft’s European operational cloud capacity across more than 200 data centres. In the United Kingdom alone, the expansion is set to increase on the four existing centres already in operation.

As part of its European strategy, Microsoft intends to establish a new European board of directors, composed entirely of European nationals and operating under European law. The company pledged to contest any governmental action that might disrupt its operations in the region, reaffirming its commitment to providing digital stability amid global uncertainties.

The announcement comes as Microsoft faces pressures from rivals and governments regarding cloud computing dominance. Its foothold in Europe signals confidence not just in the market but also in its ability to address regulatory challenges and customer demand for data sovereignty.