Microsoft Guides Q2 Revenue to $96–97B, Cuts 2026 Capex to $175B
MSFT sits 56% above its 52-week low of $349.2.
Summary
Microsoft guided next-quarter revenue to $96.0–97.1B, roughly 18–19% year-over-year growth, with Azure growth of 49–50% and capex above $50B. It trimmed calendar 2026 capex to about $175B from $190B after extending data center and office useful lives from 15 to 25 years, while keeping heavy AI infrastructure spending. The company also updated its OpenAI agreement: OpenAI can work more freely with other partners, Microsoft keeps developing its own models, and a cap was set on Microsoft's revenue-sharing payments. Commercial arrangements with OpenAI generated $10B of revenue in the quarter ended September 30. The $677B enterprise backlog rose 73% year-over-year, though it stalled versus the end of June; excluding OpenAI, backlog grew 25%. Free cash flow fell 27% to $18.63B, and quarterly capex plus finance leases of $45.2B came in below the $50.7B analyst average. Microsoft also moves to a two-segment report and will report Azure in USD, with Q2 Microsoft 365 Commercial Cloud revenue guided to about 19% growth in constant currency.
At the time of this announcement, MSFT was trading at $546.30 on NASDAQ in the Technology sector, with a market capitalization of approximately $3.9T. The 52-week trading range was $349.20 to $553.72. This news item was assessed with positive market sentiment and an importance score of 8 out of 10. Source: Wiseek News.