Microsoft Earnings Preview: Wall Street Watches Azure, Copilot and a Big Spending Jump

Microsoft will release its first quarter results after the market closes on Wednesday, giving investors a clearer read on how much customers are paying for AI tools. A year ago the company posted $4.13 per share and $77.6 billion. The shares trade near $531 and have gained about 35% since July, after lagging for most of the last fiscal year.

New Microsoft Reporting Segments Explained

This is the first report under a reorganized structure. The old three divisions are replaced by two: Agents and Infra, and Devices and Consumer. Agents and Infra covers Azure, Microsoft 365 cloud services, productivity and server licensing, industry solutions, and frontier and support services. Devices and Consumer holds search and advertising, Xbox, and Windows OEM and devices.

Segment Revenue Forecasts

Agents and Infra is projected to rise 22.5% to $75.6 billion, with Azure near $32.2 billion and Microsoft 365 near $27.4 billion. Devices and Consumer is expected to slip 6% to $15 billion.

Microsoft AI Spending, Capex and Backlog

Capital spending, leases included, is forecast above $45.9 billion, compared with $19.3 billion in the same quarter last year. Remaining performance obligations, which are signed customer contracts not yet turned into revenue, are expected to hit $705.6 billion, up 77% from $389 billion. The report also follows news that the company is offering buyouts to as many as 60,000 eligible employees as it tries to trim costs during its heavy AI build-out.