Key Highlights

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

● Revenue of $92.28 billion beat the roughly $90.6 billion expected.

● Adjusted earnings per share also topped consensus estimates.

● Capital spending came in below analyst expectations.

A $92.28 billion quarter, faster Azure growth and lower-than-expected capital spending lifted Microsoft in extended trading, setting it apart from Alphabet on a pivotal night for big tech.

On a night when investors were deciding which tech giants are getting paid for their AI bets, Microsoft came out on the right side. Microsoft (NASDAQ:MSFT) climbed in extended trading on Wednesday, October 28, after reporting fiscal first-quarter revenue of $92.28 billion, ahead of the roughly $90.63 billion analysts had expected.

The Quarter in Numbers

Revenue grew at a double-digit pace from a year earlier. Earnings per share beat forecasts, though reports differed on the figure: one source cited adjusted earnings of $4.89 a share, another $4.92, against consensus of $4.72 to $4.73.

Microsoft Cloud revenue reached $63.9 billion, topping the $61.62 billion estimate. 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.

Why It Counts as an AI Win

For much of this year, investors have questioned whether the hundreds of billions of dollars big tech is pouring into AI infrastructure will pay off. Microsoft's report offered an answer they liked: Azure growth is speeding up, suggesting customers are paying for AI and cloud services, while spending came in lower than feared.

That is the formula investors appear to want: revenue that grows faster, paired with costs that do not run away. The contrast with Alphabet (NASDAQ:GOOGL) was stark. Reporting at the same time, Alphabet slid sharply after the bell after missing earnings and revenue forecasts, reporting negative free cash flow and raising its 2026 capital spending forecast to between $195 billion and $205 billion.

Other News

Microsoft reportedly offered voluntary buyouts to up to 60,000 employees, according to market data. The AI-infrastructure trade was strong during the regular session: Vertiv (NYSE:VRT) soared after raising guidance, with chief executive Giordano Albertazzi saying the industry is in the middle of the largest infrastructure build-out and it is accelerating. Oracle (NYSE:ORCL) jumped after its investor day.

The S&P 500 rose 21.38 points to 7,743.98, its third straight gain. The Federal Reserve left its benchmark rate range unchanged in a 10-2 vote, and long-dated Treasury yields climbed.

What to Watch

Thursday's session will test whether Microsoft's gains survive the broader drag from Alphabet. Overnight, Nasdaq-100 futures pointed lower while Dow futures edged higher.

Amazon (NASDAQ:AMZN) reports after Thursday's close, giving investors another read on cloud demand through Amazon Web Services and on AI spending. Meta (NASDAQ:META) and Apple (NASDAQ:AAPL) report later this week.