Microsoft shares remain supported by Azure and AI growth

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Microsoft shares remain supported by Azure and AI growth

Azure growth keeps the outlook constructive

The next quarter also looks relatively strong for now. Microsoft is guiding the market to revenue of around $90.4 billion, which corresponds to growth of approximately 16% y/y and is slightly above analysts’ previous expectations. For Azure, management forecast further acceleration to around 45%, so the main question is no longer the availability of demand for AI and cloud capacity, but Microsoft’s ability to bring new computing capacity online quickly enough.

This is where the main fundamental risk arises: capital expenditures in the latest quarter reached around $41 billion, while in the current quarter the company plans to spend more than $50 billion. At the same time, a significant share of investments is directed toward GPUs, CPUs and data centers. High capex reduces free cash flow and forces the market to assess the return on AI infrastructure more closely, although for now the acceleration in Azure and growth in orders confirm that the new capacity is finding commercial demand.

Copilot monetization faces regulatory risks

In August, Microsoft continues to expand the commercial use of Copilot and agentic AI. The company has made a new Copilot Studio architecture generally available for more complex autonomous business processes, is expanding Copilot features in SharePoint, and is updating Azure Content Understanding with support for GPT-5 models and agentic scenarios. For investors, it is important that Microsoft is gradually moving AI from the stage of large infrastructure investments toward a model of direct monetization through Azure consumption, Microsoft 365 Copilot and usage-based billing.

At the same time, regulatory risks remain: the European Commission has preliminarily concluded that Azure and AWS may qualify for gatekeeper status under the Digital Markets Act. In the event of a final decision, Microsoft will have to comply with additional requirements related to interoperability, data portability and restrictions on promoting its own services within the cloud ecosystem.

Microsoft shares test key support after profit-taking

Thus, the fundamental picture for MSFT remains predominantly positive, but further movement increasingly depends on whether Azure and Copilot growth can justify the scale of infrastructure investment. For now, however, the proximity of strong resistance around $510-530 is encouraging profit-taking on long positions, against which the MSFT share price has currently declined toward the $486 mark.

Support around $480 may be tested next, and if it is broken, a decline toward $475-470 should be expected. Nevertheless, as I noted in the article Microsoft trades near $497 as Azure and AI support bullish outlook, since Microsoft’s overall outlook remains constructive, a decline in the share price is viewed as a “buy” signal.

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