Technology
Price
$390.49
+1.62%Market Cap
$2.9T
Day High
$392.20
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$383.70
In Q3 FY2026, Microsoft delivered strong 18% revenue growth to $82.9 billion and 23% net income growth to $31.8 billion, propelled by 40% Azure growth and a 99% surge in Commercial Remaining Performance Obligation to $627 billion, even as gross margin declined 1.1 percentage points due to continued AI infrastructure investment.
Key risk: Rising AI Infrastructure Costs Compressing Margins
Microsoft states that investments in cloud and AI infrastructure and devices will continue to increase operating costs and may decrease operating margins. This is already evidenced in Q3 FY2026 by a 47% increase in Intelligent Cloud cost of revenue and a gross margin percentage decline attributed directly to AI infrastructure investment.
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