Microsoft Cloud Revenue Hits Record as AI Demand Soars

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•  30 Jul 2025
 

•   MSFT  
   
  +4.90%

Microsoft $MSFT delivered a standout quarter, reporting $76.4 billion in revenue for Q2 2025, surpassing analyst expectations of $73.81 billion. The company’s strong performance was driven by surging demand for artificial intelligence solutions and a record-setting quarter from its Azure cloud platform. Azure revenue grew by an impressive 39%, well above the 34.75% forecast, and for the first time, Microsoft revealed Azure’s annual revenue had crossed the $75 billion mark.

This milestone highlights the strength of Microsoft position in the cloud computing market, even as it trails Amazon’s AWS, which posted $107.56 billion in revenue last year. Still, Microsoft’s rapid growth in Azure and aggressive push into AI technologies signal that it’s quickly closing the gap. The company’s stock jumped more than 6% in after-hours trading following the report and is up over 21% year-to-date.

The results come amid a broader AI race among tech giants, with industry investments expected to exceed $330 billion this year, much of it directed toward building advanced data centers to support AI workloads. Microsoft is already reaping the rewards of its early moves. It continues to invest heavily in AI innovation, including the development of autonomous “AI agents” that handle routine tasks without human intervention, and improvements to GitHub Copilot, its AI-powered coding assistant.

While Microsoft maintains an exclusive partnership with OpenAI, the company is also diversifying its AI model portfolio by integrating models from Elon Musk xAI, Meta, and the French AI company Mistral. This approach helps mitigate risks tied to the ongoing global shortage of AI chips, which has created limitations in cloud computing capacity across the industry.

Microsoft isn’t just adapting to the AI era, it’s leading it. Its ability to convert bold investments into tangible growth, especially in Azure cloud revenue and enterprise AI adoption, positions it as a dominant force in both AI and cloud markets. For investors, the story is simple, Microsoft is steering the future of AI, and it’s doing it with record-breaking results.