As Strong Growth Continues, Is It Time to Buy Microsoft Stock?

Core Insights - Microsoft reported strong fiscal Q1 2026 results, with total revenue climbing 18% year over year to $77.7 billion and adjusted earnings per share (EPS) increasing 23% to $4.13, surpassing analyst estimates [1][7] Cloud Computing Performance - Azure, Microsoft's cloud computing unit, led growth with a revenue surge of 40% (39% in constant currencies), marking the ninth consecutive quarter of over 30% revenue growth, driven by demand for AI services [2] - Overall "intelligent cloud" revenue, including Azure, increased by 28% year over year to $30.9 billion, with GitHub contributing significantly, reaching 26 million users of GitHub Copilot [3] Other Business Segments - The productivity and business processes segment, which includes Microsoft 365 and LinkedIn, saw a revenue increase of 17% year over year to $33 billion, with Microsoft 365 Consumer product revenue jumping 26% due to a price increase and 7% subscriber growth [5][6] - The "more personal computing" segment, encompassing Windows and Xbox, grew by 4% year over year to $13.8 billion, with the search and news advertising business leading this growth at 16% [6] Future Outlook - Microsoft anticipates fiscal Q1 revenue between $79.5 billion to $80.6 billion, slightly above analyst expectations of $79.95 billion [7] - The company revised its capital expenditure (capex) growth expectations upward, now forecasting faster growth than the previous year, primarily for GPUs and CPUs [8]