Microsoft’s share price declined by 10.0% following the release of its Q2 2026 results, as Azure’s growth rate and high capital expenditures (CapEx) did not align with immediate market expectations. However, the company continues to grow steadily, surpassing US$50 billion in quarterly Microsoft Cloud revenue for the first time while maintaining strong operational discipline. This performance marks the initial stage of AI diffusion, which is expected to have a broad impact on global productivity. As this technology scales, the total addressable market is projected to expand across every layer of the technology stack.
| Financial indicator | Q2 2025 (US$ million) | Q2 2026 (US$ million) | Percentage change |
| Revenue | 69,632 | 81,273 | +16.7% |
| Productivity and Business Processes | 29,437 | 34,116 | +15.9% |
| Intelligent Cloud | 25,544 | 32,907 | +28.8% |
| More Personal Computing | 14,651 | 14,250 | -2.7% |
| Operating income | 31,653 | 38,275 | +20.9% |
| Net income | 24,108 | 38,458 | +59.5% |
Gross margin declined from 68.7% to 68.0% year-on-year in Q2 2026, driven by heavy investments in AI infrastructure, increased product usage, and foreign exchange tailwind. These were partially offset by efficiency gains in Azure and a favourable shift...
