Microsoft Earnings Beat Estimates but Stock Dips Amid AI Cost Scrutiny

Microsoft Corp. reported fiscal third-quarter revenue of $82.9 billion, surpassing analyst expectations of $81.39 billion. Despite the beat, shares fell 3% as investors weighed the rising costs of artificial intelligence investments against strong cloud performance.

Adjusted earnings per share reached $4.27, exceeding the $4.06 consensus. Revenue growth accelerated to 18% year-over-year (15% in constant currency), with operating income climbing 20% to $38.4 billion. Azure cloud services continued driving results, absorbing growing AI demand across enterprise segments.

GAAP net income jumped 23% to $31.8 billion. Non-GAAP figures—excluding impacts from the OpenAI partnership—showed 20% profit growth. The company reported identical GAAP and adjusted EPS this quarter as OpenAI-related adjustments had no per-share effect.