Key Highlights

● Microsoft reportedly offered buyouts to up to 60,000 employees.

● Shares were roughly flat during the regular session.

● After the bell, Microsoft beat on revenue and earnings.

● Azure growth accelerated and topped expectations.

Microsoft was one of the most talked-about stocks, drawing heavy attention after a report that it offered voluntary buyouts to tens of thousands of employees, before delivering quarterly results that beat expectations after the close.

The reported buyout offer drew attention because of its potential scale, arriving as large tech companies pour record sums into artificial intelligence infrastructure, which put Microsoft's own capital spending figures under scrutiny. Despite the buzz, Microsoft shares were essentially flat during the regular session.

The Earnings Beat

The bigger move came after the bell, as Microsoft reported fiscal first-quarter earnings per share that topped consensus estimates, with revenue also beating forecasts. Microsoft Cloud revenue reached a new high, topping estimates, and growth in Azure, the company's cloud computing platform, accelerated and beat expectations.

Capital spending came in below consensus, according to a market recap, a detail that may matter as much as the revenue beat, given investor focus on AI spending discipline.

A Contrast With Alphabet

Microsoft's results stood in sharp contrast to Alphabet, which slid sharply after the bell after missing estimates on both revenue and earnings and reporting negative free cash flow, which weighed on Nasdaq-100 futures overnight.

The AI-infrastructure trade was strong during the regular session, with Vertiv soaring after raising guidance and Oracle jumping after its investor day.