REDMOND, Wash., April 27, 2026, 09:03 PDT
- Microsoft drops its fiscal Q3 numbers after the bell on Wednesday. This time, the spotlight’s not really on earnings—it’s on Azure’s momentum, AI investment levels, and just how deep the company’s OpenAI ties run.
- The company shed $357 billion in market value following its last earnings, even though revenue and profit numbers came in strong. Investors weren’t convinced by the pace of its AI expansion.
- Microsoft’s deal with OpenAI, unveiled Monday, introduces a fresh complication ahead of earnings. The company still gets top OpenAI cloud access, but its license is now non-exclusive, with revenue-sharing terms getting a shake-up.
This week, Microsoft has more at stake than simply topping earnings estimates. The software giant releases fiscal Q3 numbers Wednesday, following a rough January drop that made one thing clear: investors now expect concrete evidence that its AI investments are boosting cloud sales—not just inflating data center costs.
That’s what makes the timing notable. Microsoft and OpenAI tweaked their partnership Monday: OpenAI products will continue to debut on Azure—unless Microsoft’s cloud can’t handle a given requirement. OpenAI, for its part, now has the green light to reach customers via other cloud providers. Microsoft’s OpenAI IP license? No longer exclusive.
The tweak comes just two days before Microsoft posts earnings, with focus still locked on how deep the company’s AI ambitions tie in with OpenAI—and how quickly it can monetize Copilot, Azure, and its own AI models. Under the new arrangement, OpenAI will keep paying Microsoft a revenue share through 2030, up to a certain limit, but Microsoft itself will stop paying a revenue share back to OpenAI, the companies confirmed.
Wall Street is looking for Microsoft to deliver revenue close to $81.4 billion, with adjusted earnings per share landing between $4.06 and $4.07. The company’s forecast put revenue anywhere from $80.65 billion to $81.75 billion—translating to 15% to 17% growth.
Azure’s numbers will likely draw the sharpest reaction. Microsoft is projecting 37% to 38% revenue growth for Azure and other cloud services, measured in constant currency—so, after removing currency effects. That’s a notch lower than last quarter’s 39%.
Capital spending remains a sticking point. On the latest earnings call, CFO Amy Hood pegged Microsoft’s capex at $37.5 billion—covering data centers, chips, the whole range of infrastructure. About two-thirds of that went toward short-lived assets, mostly GPUs and CPUs. “Our customer demand continues to exceed our supply,” Hood said. Microsoft
Bulls have their data point in the backlog, though it doesn’t hide the concentration risk. Microsoft reported its commercial remaining performance obligation hit $625 billion last quarter—essentially revenue still to be recognized. OpenAI accounted for roughly 45% of that total. The rest? It grew 28%.
Despite the hype, Copilot accounts for a relatively modest slice of Microsoft’s business. Back in January, Microsoft put paid Copilot users at 15 million—which works out to just 3.3% of the Microsoft 365 commercial customer base, GeekWire reported. For context, Microsoft previously said commercial 365 seats topped 450 million last quarter.
Guggenheim’s John DiFucci is sticking with his Buy on Microsoft and a $586 target, TheStreet reports, but he’s cautious on Azure. DiFucci thinks the company might post decent numbers, yet the shares could stumble if Azure growth fails to reach that 37% to 38% mark.
Dan Ives over at Wedbush Securities struck a more upbeat tone on OpenAI’s reshuffle Monday. He views the revised agreement as a push that gets OpenAI closer to an IPO, while also giving Microsoft some breathing room to build out tech independence on its Copilot project and tap outside AI vendors like Anthropic.
Microsoft’s numbers won’t land in isolation. Alphabet, Amazon, and Meta are also set to deliver results later that afternoon—lining up a head-to-head look at Azure, Amazon Web Services, and Google Cloud, plus a window into how far the sector is ready to push on AI infrastructure spending.
The risks aren’t hard to spot. Should Azure growth come in soft, Copilot usage remain sluggish, or capital spending stay elevated instead of pulling back from January’s peak, a solid earnings print might not be enough to keep investors happy. ServiceNow’s shares plunged 17% last week after its report—a stark reminder that business software appetite might not match the AI-fueled optimism.
Microsoft, aiming to rein in expenses, is moving ahead with its first-ever voluntary employee buyout since its founding 51 years ago, according to Reuters. The program targets U.S. staff at or below the senior director level, provided their age and tenure add up to at least 70. When asked, Microsoft did not provide a comment to Reuters.
It’s a tough bar: Azure can’t stumble, capex has to seem disciplined, and Microsoft has to convince investors that AI demand is showing up now, not just buried in forward-looking deals or partner chatter. Solid revenue and profit numbers, as seen in January, might not cut it this time.
