REDMOND, Washington, May 4, 2026, 14:07 (PDT)
Microsoft hovered near the flatline Monday afternoon, following Jim Cramer’s take that the tech giant’s latest quarter was “okay” but “not joyous”—even though it topped forecasts. Shares last changed hands at $413.62, off $0.75, putting Microsoft’s market value in the ballpark of $3.08 trillion. Investors zeroed in on AI outlays and software momentum. Insider Monkey
Now it’s less about whether Microsoft can keep growing, and more about whether Azure, Copilot and the company’s wider AI push can ramp up quickly enough to cover the mounting costs—data centers, chips, cloud resources all add up.
Microsoft’s fiscal third-quarter revenue reached $82.9 billion, an 18% increase, with diluted earnings per share coming in at $4.27. Microsoft Cloud revenue jumped 29% to $54.5 billion. Azure and other cloud services posted a 40% gain—a figure closely watched by investors looking for signs that AI spending by businesses is starting to push up cloud sales.
Cramer threw out his warning following a stretch where investor sentiment on the stock had been all over the place. Earlier, he’d floated the idea that Microsoft could be considered “cheap,” but at the end of the day, it’s still “software.” Heading into the earnings report, Cramer made it clear he didn’t expect Copilot demand to impress—“not-so-hot,” as he put it—even if Microsoft posted a strong data-center result. Insider Monkey
Microsoft offered its own numbers to address those doubts. CEO Satya Nadella told analysts the company now counts “over 20 million Microsoft 365 Copilot paid seats,” up 250% in new seats from a year ago. Accenture represents the firm’s biggest Copilot deal so far, with more than 740,000 seats; Bayer, Johnson & Johnson, Mercedes, and Roche have each signed on for at least 90,000. Copilot serves as Microsoft’s AI tool within Word, Excel, Teams, and other work apps. Microsoft
Microsoft’s vice president of investor relations, Jonathan Neilson, told Reuters that the number of paid Microsoft 365 Copilot users jumped from 15 million in January to 20 million. That’s a quarterly increase of 5 million seats. “Feel very, very good,” Neilson said of the growth. Reuters
Most of the heft comes from AI infrastructure. Microsoft’s AI business just blew past a $37 billion annual revenue run rate, CEO Satya Nadella said—marking a 123% jump year over year. Chief Financial Officer Amy Hood pointed to stronger-than-forecast numbers across revenue, operating income, and EPS for the quarter, attributing the outperformance to surging Microsoft Cloud demand.
Still, spending keeps flashing as the main risk. Microsoft shelled out $31.9 billion on capex last quarter—data centers, chips, servers, the works. CFO Amy Hood told analysts capex should climb past $40 billion in the fourth fiscal quarter, with the total pushing close to $190 billion for calendar 2026. Of that, around $25 billion is pinned to pricier components.
The spending fight is heating up as rivals jostle for cloud dominance. Google Cloud pulled off a 63% revenue jump, Reuters said, and Microsoft projected Azure would climb 39% to 40% this quarter, adjusted for currency swings. Alphabet and Amazon are stepping up their moves in cloud AI, leaving Microsoft under pressure to prove its infrastructure splurge pays off in lasting gains, not simply swelling expenses.
The risk is clear: a limited Copilot rollout compared to Microsoft’s massive Office install base—or Azure gains that don’t pick up speed while supply stays tight—could leave the $190 billion investment leaning on free cash flow and margins. According to Microsoft, demand continues to outstrip what’s available, and those constraints may last at least until 2026.
Plenty of optimism remains on Wall Street. According to Insider Monkey, Benchmark bumped its Microsoft target up to $525 from $450, reaffirming a Buy after the company topped consensus on both revenue and adjusted profit. Cramer, though, wasn’t convinced—the latest quarter, he argued, left too many questions unanswered.
Microsoft put its fiscal Q4 revenue outlook at $86.7 billion to $87.8 billion, projecting Azure growth of 39% to 40% in constant currency. The bar is clear for what comes next: ramp up Copilot adoption, drive Azure usage higher, and prove out returns on that expanding AI investment.
