Microsoft's Azure clouds revenue skyrockets to $75 billion amid AI push

In the fiscal year ending June 30, 2025, Microsoft reported that its Azure cloud computing platform has surpassed $75 billion in annual revenue, reflecting a remarkable 34% increase from the prior year. This significant financial milestone was unveiled in the software giant's year-end earnings report, which also indicated a notable 24% surge in the company's quarterly profit, exceeding Wall Street estimates and reassuring investors regarding Microsoft's data center expansion intended to meet rising cloud computing and artificial intelligence demands. CEO Satya Nadella highlighted during an investor call that Microsoft continues to scale its data center capacity at a faster rate than its competitors, now operating over 400 facilities across six continents. Despite the impressive revenue growth, Microsoft announced workforce reductions of about 15,000 employees earlier in the year, a decision Nadella stated was challenging but necessary for the company's reimagined mission in the evolving AI landscape. The overall employee count remains unchanged at 228,000, although the distribution of roles has shifted. The earnings report revealed an overall fiscal fourth-quarter profit of $34.3 billion, or $3.65 per share, surpassing analyst projections of $3.37 per share. During the April to June period of 2025, the company achieved revenues of $76.4 billion—an increase of 18% from the same period last year. Although it is a leader in the cloud sector, Microsoft still trails behind Amazon Web Services, which reported $107.6 billion in revenue for the preceding fiscal year. Microsoft’s commitment to enhancing its cloud infrastructure comes amidst rising concerns over geopolitical uncertainties and U.S. tariff complexities that could impact operational expenditures and market competitiveness. The announcement of increased capital spending, projected at $30 billion for the July-September quarter, reflects Microsoft's aggressive strategy in driving AI and cloud innovation. In contrast, Google's recent earnings call indicated a budget increase for capital expenditures, showing that major tech companies are gearing up for a sustained investment in data centers and essential technologies that support their growth in artificial intelligence and cloud services. As the competitive landscape intensifies, Microsoft aims to position itself not only as a cloud service provider but as a leader innovating in AI-driven solutions for enterprise clients who depend on its cloud capabilities.