Microsoft shares rise after Azure sales disclosure; AI cloud growth in focus

Microsoft on Wednesday disclosed quarterly and annual sales for its Azure cloud computing business for the first time, giving investors a clearer comparison with rivals Amazon.com and Alphabet's Google as the companies compete to meet surging demand for artificial intelligence infrastructure.

Azure generated $29.4 billion in sales in Microsoft's latest quarter and $101.9 billion in the fiscal year ended June 30, the company said. That puts Microsoft behind Amazon Web Services, which reported quarterly cloud sales of $42.2 billion, but ahead of Google Cloud, which posted $24.8 billion in quarterly revenue.

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Reuters reported that Microsoft had previously disclosed Azure's growth rate but had not provided its revenue separately, making direct comparisons with its largest cloud rivals more difficult.

The company also announced changes to its reporting structure, moving from three business segments to two. The new "Agents and Infra" segment will include cloud services, AI-related software and traditional business software, while "Devices and Consumer" will cover Windows, Xbox and advertising revenue from Bing and LinkedIn.

Microsoft said the restructuring reflects the growing impact of artificial intelligence across its products and business operations.

The company also revised its Azure revenue forecast for the current quarter slightly lower than the outlook provided last month. Microsoft said the adjustment was primarily due to the reclassification of some GitHub sales, which had previously been included with Azure and will now be reported alongside its M365 Cloud software business, Reuters reported.

The broader outlook for the current quarter remained unchanged.

Microsoft is a major cloud provider to OpenAI. The relationship has expanded beyond Microsoft's infrastructure as changes to their agreement have allowed OpenAI to work with Amazon Web Services and other providers.

For calendar 2025, AWS recorded $128.7 billion in sales, while Microsoft Azure generated $85.8 billion over the comparable four-quarter period. Google has not disclosed full-year cloud revenue.

Microsoft shares gained about 1.4% in after-hours trading on Wednesday following the announcement.

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