Long-term Cloud Strategy Revolves Around Quantum Computing, Says Microsoft (MSFT)'s Chairman and CEO

Microsoft Corporation (NASDAQ:MSFT) is one of the Best Cloud Computing Stocks to Invest in Now. Taking cues from the company’s Q4 2025 earnings call, it seems that the tech giant’s long-term cloud strategy revolves around quantum computing. Microsoft Corporation (NASDAQ:MSFT) believes that the next big accelerator in the cloud is expected to be Quantum.

As per Jason Zander, Executive Vice President, Microsoft Corporation (NASDAQ:MSFT), along with Atom Computing, the company continues to strive to build the world’s most powerful quantum computer, which applies Microsoft Corporation (NASDAQ:MSFT)’s advanced error correction to Atom Computing’s high-fidelity qubits.

For Q1 2026, the company expects that the Microsoft Cloud gross margin percentage should be ~67%, down YoY. This is because of the impact of the continuous scaling of its AI infrastructure. Microsoft Corporation (NASDAQ:MSFT) expects Q1 2026 capital expenditures to be more than $30 billion due to the continued healthy demand signals. For Intelligent Cloud, Microsoft Corporation (NASDAQ:MSFT) expects Q1 2026 revenue of between USD 30.1 billion – USD 30.4 billion, or growth of 25% to 26%, with ~1 point of benefit from FX. Notably, the revenue is expected to be driven by Azure.

Kovitz Investment Group Partners, LLC, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:

“We initiated a position in Microsoft Corporation (NASDAQ:MSFT) at the beginning of the year on the premise that cloud infrastructure revenues were set to accelerate as capital expenditures shifted to monetizable servers in favor of spending on datacenter buildouts. In its most recently reported results, the company reported a significant acceleration in Azure revenue growth and indicated that growth will sustain at these levels for the following quarter, which was several points above consensus expectations. Earnings estimates for the next several years moved higher as a result.”

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Disclosure: None. This article is originally published at Insider Monkey.