Microsoft Shares Fall 1.66% as Fiscal 2026 Cash Spending Hits $115.95 Billion

Microsoft shares fell 1.66% to $524.10 Thursday, Oct. 22, after reversing an early climb above $532; its fiscal 2026 results also showed sharply higher cash investment and continued cloud growth.

Cash outlays for property and equipment reached $115.95 billion in fiscal 2026, versus $64.55 billion in the previous fiscal year. Finance leases added investment beyond that cash figure. In the fourth quarter, capital expenditures totaled $41 billion, including assets acquired through finance leases. About two-thirds went to shorter-lived equipment, mainly processors and graphics chips. The rest went to longer-lived assets, including data center sites.

Microsoft projected capital spending above $50 billion for the first quarter of fiscal 2027. The projection includes a lease reclassification after revised useful-life estimates for some assets.

Fiscal 2026 marked the first year in which Azure's revenue exceeded $100 billion. Azure and other cloud services revenue grew 43% in the fourth quarter, while Microsoft Cloud revenue rose 27% to $59.3 billion. Commercial remaining performance obligations, which measure contracted revenue expected to be recognized in later periods, climbed 84% to $678 billion at year-end. Growth was 25% excluding OpenAI commitments. Customers outside leading model companies accounted for nearly 90% of annual Microsoft Cloud revenue, and Microsoft 365 Copilot surpassed 30 million paid seats.

For the fiscal year ended June 30, revenue increased 18% to $331.8 billion and operating income rose 21% to $155.2 billion. Fourth-quarter operating cash flow grew 30% to $55.4 billion. Free cash flow was $19.6 billion after property and equipment spending, and Microsoft returned $10.2 billion through dividends and share repurchases during the quarter.

Microsoft raised its quarterly dividend by 7 cents to 98 cents per share in September. The payment is due Dec. 10, with Nov. 19 set as the record date and ex-dividend date.

Microsoft plans to release fiscal 2027 first-quarter results after the market closes Oct. 28. Its earnings call is scheduled for 5:30 p.m. ET (21:30 UTC), as noted in earlier coverage of Microsoft’s earnings schedule.