Microsoft (NASDAQ:MSFT) shares rose 4.0% in premarket trading on Thursday after the company reported fiscal first-quarter 2027 revenue and earnings above Wall Street expectations, supported by growth in its Azure cloud computing business.
For the quarter ended September 30, 2026, Microsoft reported revenue of $92.3 billion, an increase of 19% from the previous year. GAAP diluted earnings per share rose 32% to $4.92.
Azure revenue increased 48% year over year to $33.2 billion, exceeding the company’s previous growth guidance and analysts’ forecasts. Microsoft also projected further Azure growth for the December quarter.
Microsoft shares advanced 4.0% before Thursday’s market opening following the publication of its fiscal first-quarter financial results.
The company reported revenue and earnings per share above analysts’ expectations, with Azure accounting for a significant part of the reported growth.
Microsoft’s quarterly revenue reached $92.3 billion, compared with the corresponding period a year earlier, representing an increase of 19%.
GAAP diluted earnings per share rose 32% to $4.92.
The results prompted a positive share price reaction during trading following the earnings announcement, with the increase continuing into Thursday’s premarket session.
Azure revenue increased 48% year over year to $33.2 billion during Microsoft’s fiscal first quarter.
The growth rate exceeded the company’s previous guidance of approximately 44% to 45% and was also above analysts’ expectations.
Azure’s reported growth accelerated from the preceding quarter, indicating a higher rate of expansion in Microsoft’s cloud computing operations.
The business provides cloud infrastructure and computing services used by enterprise customers, software developers and organisations deploying artificial intelligence applications.
The latest results provided additional information about demand for Microsoft’s cloud services and its ability to support expanding computing requirements.
Microsoft projected Azure revenue growth of 49% to 50% for its fiscal second quarter, which ends in December.
The forecast represents a higher growth rate than the 48% recorded in the September quarter.
The outlook was among the factors considered by investors following the earnings announcement.
Azure’s performance remains relevant to Microsoft’s financial results because the business supports cloud computing, data processing and artificial intelligence workloads.
The forecast reflects management’s expectations and remains subject to actual business conditions during the quarter.
Microsoft reported a commercial backlog of $677 billion, representing an increase of 73% compared with the previous year.
The backlog reflects contracted business that has not yet been recognised as revenue.
The increase provides information about customer commitments to Microsoft’s commercial products and services, including cloud computing and artificial intelligence offerings.
However, backlog figures do not represent revenue already earned, and the timing of future revenue recognition depends on the terms of the underlying contracts.
The reported increase was another component of Microsoft’s fiscal first-quarter announcement that investors evaluated alongside current revenue growth.
Following Microsoft’s results, Barclays increased its price target for the company’s shares to $610 from $600.
The investment bank maintained its Overweight rating.
The revised target followed the release of Microsoft’s quarterly financial figures and its outlook for Azure revenue growth.
The $610 price target represents Barclays’ assessment of the stock’s potential valuation rather than a guaranteed future trading price.
The analyst update was among the developments accompanying Microsoft’s premarket share price increase.
Microsoft Chief Executive Officer Satya Nadella provided additional information about the company’s Copilot artificial intelligence services during the earnings conference call.
Nadella said the number of daily Copilot users had increased 50% compared with the previous year.
He also reported that user satisfaction had improved by nearly 20% from the preceding quarter, reaching its highest level to date.
The figures provided information about the adoption and use of Microsoft’s AI-related products.
Copilot forms part of Microsoft’s broader portfolio of artificial intelligence services, which operates alongside its cloud computing and enterprise software businesses.
Microsoft’s premarket increase occurred during a period of mixed performance among major US technology companies.
Alphabet (NASDAQ:GOOG) shares declined following the release of its third-quarter financial results, which fell short of analysts’ revenue and earnings expectations.
Alphabet also reported negative free cash flow, drawing attention to the financial effects of its investment spending.
Microsoft, by comparison, reported revenue and earnings above expectations, alongside higher Azure growth and an increased growth forecast for the December quarter.
The contrasting earnings announcements contributed to different share price movements between the two companies.
The Federal Reserve maintained its benchmark interest rate at its October 28 meeting.
The decision formed part of the broader financial market environment as investors assessed corporate earnings and expectations for monetary policy.
During the reported trading period, the Nasdaq declined 1.1%, while the S&P 500 fell 0.2%.
Microsoft’s shares nevertheless increased 4.0% in premarket trading following its earnings announcement.
The difference between Microsoft’s share price movement and the broader indices highlighted the company-specific developments being evaluated by investors.
Microsoft’s financial performance in the December quarter will provide further information about whether Azure achieves management’s projected revenue growth of 49% to 50%.
Investors may also monitor the conversion of the company’s $677 billion commercial backlog into recognised revenue, as well as changes in Copilot usage and customer adoption.
Additional considerations include the company’s investment requirements for cloud infrastructure, operating costs and future earnings performance.
The company’s share price had moved above its previous 52-week high in premarket trading and was positioned for its largest daily percentage increase in more than three months, based on the reported movement.
Microsoft develops software, cloud computing services and artificial intelligence products for businesses, consumers and public-sector organisations.
Its operations include Azure cloud infrastructure, Microsoft 365 productivity applications, Copilot AI services and other enterprise and consumer technology products.
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