Microsoft Cloud Revenue Surges to $75 Billion as AI Push Gains Momentum

Microsoft’s Azure cloud platform generated over $75 billion in annual revenue, up 34% as AI becomes central to its strategy. Quarterly profits rose 24%, surpassing expectations. Despite 15,000 layoffs, workforce levels stayed flat. With major investments in data centers and AI, Microsoft is positioning itself for long-term cloud dominance.

Microsoft has reported a record-breaking year in cloud revenue, with its Azure platform generating over $75 billion in annual revenue—a 34% rise compared to last year. The announcement came as part of the company's fiscal fourth-quarter earnings report, which also revealed a 24% increase in profit, totaling $34.3 billion, or $3.65 per share, surpassing Wall Street estimates.

This surge reflects Microsoft’s aggressive pivot towards artificial intelligence, as Azure becomes central to its strategy of integrating AI into enterprise services. CEO Satya Nadella emphasized that Microsoft is outpacing rivals in expanding its global data center network, now boasting more than 400 facilities across six continents. The investments are driven by growing demand for AI tools and cloud infrastructure.

Despite the financial success, Microsoft continues to tighten operations. About 15,000 layoffs were implemented this year, even as the company maintained the same total headcount of 228,000 full-time employees compared to a year ago. This rebalancing has shifted roles away from support and consulting toward AI and cloud development.

The company's quarterly revenue hit $76.4 billion, exceeding analysts’ expectations of $73.86 billion. However, Microsoft still trails behind Amazon Web Services, which closed last year with $107.6 billion in cloud revenue. To compete, Microsoft plans to invest $30 billion in capital expenditures for the current quarter, underscoring its commitment to dominating the AI and cloud space.

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Microsoft also warned of uncertainties posed by shifting U.S. trade policies and tariffs, which could impact its global supply chain and operational costs. Still, investor confidence remains strong, with the company’s strategic shift to AI infrastructure seen as a long-term growth driver.