Redmond, Washington — Microsoft experienced a significant stock surge in after-hours trading on Wednesday following the announcement of robust quarterly earnings, driven largely by a surge in cloud computing revenue. The company reported an 18% year-over-year increase in revenue, totaling $76.4 billion for its fiscal fourth quarter, comfortably surpassing the anticipated $73.8 billion forecast.

Earnings per share also exceeded expectations, climbing 24% to $3.65, compared to the projected $3.37. Following the announcement, Microsoft’s stock rose over 8% in after-hours trading, positioning the company to join the prestigious $4 trillion market capitalization club alongside competitors like Nvidia.

This latest performance further cements Microsoft’s dominance in artificial intelligence, with its cloud computing division, Azure, seeing a notable acceleration in growth. CEO Satya Nadella disclosed that Azure generated over $75 billion in revenue during the fiscal year, marking a substantial 34% increase from the previous year. The company indicated that demand for cloud services continues to surpass supply, hinting at strong growth prospects going forward.

Looking ahead, Microsoft provided an optimistic revenue forecast for the first quarter of fiscal 2026, predicting revenue of $75.25 billion, exceeding the expected $74.18 billion. Management expects Azure’s revenue growth to reach approximately 37% in constant currency for the upcoming quarter, a slight decline from current figures but still above analyst expectations.

Microsoft’s commitment to enhancing its infrastructure is evident, with anticipated capital expenditures set to exceed $30 billion in the first quarter alone. This marks a notable increase from the $20 billion spent in the same period last year. Executives expressed confidence that investment in infrastructure is driven by sustained demand for cloud solutions, underlining their leadership in AI and data center operations.

The company’s “commercial remaining performance obligation,” or backlog, stood at $368 billion at the end of the quarter, with approximately 35% expected to be recognized as revenue within the next year. This substantial backlog, along with the recent uptick in Azure’s growth, substantiates Microsoft’s aggressive capital strategy moving forward.

In other segments, productivity and business processes outperformed revenue estimates, showcasing improvements in operating income and margins. Microsoft 365 commercial cloud revenue rose 18%, bolstered by the introduction of new AI-driven features and a 6% increase in user seats. Meanwhile, LinkedIn and Dynamics 365 also reported sales growth, contributing to an overall positive outlook for the company.

Despite the strong performance, some analysts remain cautious. While individual segments fared well, operating income in certain areas missed expectations, prompting a wait-and-see approach as the market digests the results. Overall, the strong quarterly performance and optimistic guidance position Microsoft favorably as it continues to navigate an evolving technology landscape.