Microsoft (MSFT)'s Q3 Results Reflect Both the Promise and the Cost of Its AI-Driven Cloud Expansion

Representing 27.27% of Bill Gates’s stock portfolio, Microsoft Corporation (NASDAQ:MSFT) is one of his top 15 stock picks.

On October 29, 2025, Microsoft Corporation (NASDAQ:MSFT) reported fiscal Q1 2026 results. The quarter featured both the promise and the cost of its AI-driven cloud expansion.

Microsoft Corporation’s (NASDAQ:MSFT) capital expenditures reached a record $35 billion in the quarter, going past Wall Street estimates, with the company pouring money into AI infrastructure to ease capacity constraints that have limited Azure’s growth. The investment is already showing results, as Azure exceeded expectations with a 40% YoY revenue surge. Meanwhile, the total revenue rose 18% to $77.77 billion and profit reached $3.72 per share, both surpassing estimates.

The Q3 beat was followed by the company’s November 3 announcement that it will bring its total investment in the United Arab Emirates to $15 billion by 2029. With $7.3 billion already invested between 2023 and the end of 2025, this means Microsoft Corporation (NASDAQ:MSFT) will further invest $7.9 billion. Having already received U.S. approval to export Nvidia chips, this investment will help the company expand AI data centers across the UAE.

Microsoft Corporation (NASDAQ:MSFT) is focused on developing and supporting software, services, devices, and cloud-based solutions globally.

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