Mark Roussin, CPA on $MSFT (Nov 1, 2026)
Microsoft's quarter was the best among Alphabet, Microsoft and Amazon: Azure revenue rose 48% year-over-year and cloud revenue was about 64 billion, up 30%; despite third-party capacity delays, Azure exceeded expectations, and commercial RPO of about 677 billion is massive contracted future revenue.
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Then, we'll discuss what Alphabet, Microsoft, and Amazon just told us about the AI investment cycle.
When companies like Alphabet, Microsoft, and Nvidia, or Apple, per se, when they have large declines, they can pull the index lower even when many other stocks are performing quite well.
Over the past week, three of the largest tech companies in the world reported earnings. Alphabet, which you could say is a communications company, Microsoft, and then Amazon, which is also consumer discretionary. I still look at them as tech stocks.
And as you can see here on this chart, these stocks went in very different directions, but I believe the underlying results revealed something extremely important. The AI infrastructure buildout is still expanding.
Now, let's look at Microsoft. And I believe Microsoft's results were particularly interesting. Easily the best of the three companies we mentioned.
Azure revenue. It increased 48% year-over-year. That's extraordinary growth for a business operating at Microsoft scale. And the company reported approximately 64 billion in Microsoft cloud revenue, representing growth of 30%.
But here's what really caught my attention. Microsoft discussed capacity constraints as well. The company noted delays in bringing certain third-party computing capacity online during the quarter and despite those constraints, Azure still exceeded expectations.
Microsoft, they also reported commercial remaining performance obligation or RPOS of approximately 677 billion. That is a massive amount of contracted future revenue.