Key Highlights

  • Microsoft (NASDAQ:MSFT) reported fiscal 2026 fourth quarter revenue of USD 90.0 billion, up 18%, with Azure and other cloud services growth of 43% and GAAP net income of USD 35.8 billion.
  • Commercial remaining performance obligation reached USD 678 billion, up 84%, in the quarter ended June 30, 2026, reflecting signed cloud and AI contracts not yet recognized as revenue.
  • Additions to property and equipment were USD 35.8 billion in the quarter and USD 115.9 billion for fiscal 2026, lifting net property and equipment to USD 313.1 billion.
  • OpenAI items added a net gain of USD 480 million to fourth quarter GAAP results and USD 4.96 billion for fiscal 2026, versus a USD 3.62 billion loss in fiscal 2025.

The Results Before the Next Report

Microsoft (NASDAQ:MSFT) released fiscal fourth quarter results on July 29, 2026. Revenue was USD 90.0 billion, GAAP diluted earnings were USD 4.81 per share and non-GAAP earnings, which exclude the OpenAI investment impact, were USD 4.74. Azure and other cloud services grew 43%. The company reports fiscal first quarter 2027 results after the close on October 28, 2026, with a call at 5:30 p.m. ET. Revenue guidance of about USD 89.85 billion to USD 90.95 billion was reported, and a consensus of USD 4.71 per share was listed. Revenue growth in the quarter was 18% and cloud growth was far faster, which is why capacity spending stays central to the story.

The OpenAI Loop

Microsoft owns a stake in OpenAI, which it accounts for under a method that passes OpenAI results into Microsoft earnings, so the USD 4.96 billion fiscal 2026 gain shows how a private valuation can feed reported profit. OpenAI also buys cloud capacity from Microsoft, and Microsoft buys Nvidia (NASDAQ:NVDA) chips to supply it. Anthropic is a customer too, and Nvidia and Microsoft were reported to have committed USD 15 billion to it in late 2025 against a USD 30 billion Azure commitment, a figure not matched to a filing. The chart shows Microsoft at USD 4 trillion, and its arrows to OpenAI and Anthropic run in both directions: investment out, cloud revenue back. That two-way flow is what makes the backlog partly circular, since the customer's ability to pay rests on funding rounds in which Microsoft also takes part.

Risks and What to Watch

Backlog is only as good as customers' ability to pay. A large share is tied to a few AI labs that rely on outside funding, and net property and equipment grew from USD 205.0 billion to USD 313.1 billion in a year, so depreciation will weigh on margins. Watch Azure growth against 43%, capex guidance, backlog growth, margin pressure from depreciation and any change in OpenAI accounting. Oracle (NYSE:ORCL) faces similar customer concentration. Amazon (NASDAQ:AMZN) does too, and both report on or near the same dates. Any change in OpenAI funding would reach all three at once, which is the kind of correlated exposure the chart implies.

Where Things Stand

Microsoft (NASDAQ:MSFT) carries a USD 678 billion backlog because AI labs and enterprises signed large multi-year cloud commitments, many tied to OpenAI and Anthropic, which are themselves funded by outside investors. The evidence is strong on demand, with Azure up 43%, but mixed on circularity, since OpenAI gains boost earnings and OpenAI spending boosts Azure. The October 28, 2026 report will show whether backlog and capex keep rising together, and whether Azure growth holds near 43% as the base gets larger.