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Microsoft CEO Satya Nadella (Jason Redmond/Getty Images)

Microsoft powers past Q4 earnings and revenue expectations

Double-digit revenue growth in its cloud and productivity businesses helped push revenue 18% higher.

Jon Keegan

Shares of Microsoft surged after the company blew past fiscal fourth-quarter earnings and revenue expectations.

Shares were up 7.3% in recent after-hours trading.

The tech giant reported revenue of $76.4 billion, up 18% year on year, surpassing Wall Street estimates of $73.86 billion. Earnings per share came in at $3.65, compared with analysts’ expectations of $3.37, according to FactSet.

Breaking down the results by the company’s businesses:

  • ☁️ 🤖 “Intelligent Cloud” (Azure, server products): $29.9 billion in revenue, up 26% year on year

  • 📝 📊 “Productivity and Business Processes” (Microsoft 365, LinkedIn, Dynamics): $33.1 billion in revenue, up 16% year on year

  • 💻 🎮 “More Personal Computing” (Windows, Xbox, Bing): $13.5 billion in revenue, up 9% year on year

Microsoft CEO Satya Nadella said demand for cloud computing and AI was powering the company’s strong performance:

“Cloud and AI is the driving force of business transformation across every industry and sector. We’re innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75 billion in revenue, up 34 percent, driven by growth across all workloads.”

Capital expenditures for the quarter were $17.08 billion, compared to analysts’ consensus of $17.84 billion. The company had forecast an increase from the third quarter’s $16.7 billion.

Microsoft’s Azure cloud business grew 39% year on year.

For FY 2025, total revenue was $281.7 billion, up 15%.

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Constellation, Talen, and NRG surge as BNP analysts see “golden (AI)ge” ahead for them

Power producers Talen Energy, Constellation Energy, and NRG jumped Wednesday, benefiting in part from a rosy write-up by analysts at BNP Paribas, who launched coverage of all three at “outperform” and argued that the AI energy trade — a big AI-related winner in recent years that has lagged a bit recently — is due for a second wind.

That view was in a broad note on the independent power producer segment of utilities industry that the analysts published Wednesday, titled “The Golden (AI)ge of IPPs.”

Here’s the gist of it:

US independent power producers (IPPs) have lagged the AI basket for 6+ months, after garnering much attention in 2023-1H25. Investors are caught up in the minutia of perceived headwinds: underwhelming pace of power purchase agreement deals, distributed behind-the-meter solutions stealing the ‘time-to-power’ edge, pressure for data centers to bring generation and not tighten the grid, etc.

And yet, as we demonstrate, despite all this noise, the wave of rising load is at the cusp of an acceleration that will nonetheless overwhelm new supply—well into the 2030s, in our view. Hop on or risk missing the resurgent AI trade this decade.

BNP’s price targets for the stocks — Constellation ($407), NRG ($232) and Talen ($549) — implied gains of 32%, 50%, and 68% respectively. (Though today’s gains would reduce those potential upside targets somewhat for new buyers.)

US independent power producers (IPPs) have lagged the AI basket for 6+ months, after garnering much attention in 2023-1H25. Investors are caught up in the minutia of perceived headwinds: underwhelming pace of power purchase agreement deals, distributed behind-the-meter solutions stealing the ‘time-to-power’ edge, pressure for data centers to bring generation and not tighten the grid, etc.

And yet, as we demonstrate, despite all this noise, the wave of rising load is at the cusp of an acceleration that will nonetheless overwhelm new supply—well into the 2030s, in our view. Hop on or risk missing the resurgent AI trade this decade.

BNP’s price targets for the stocks — Constellation ($407), NRG ($232) and Talen ($549) — implied gains of 32%, 50%, and 68% respectively. (Though today’s gains would reduce those potential upside targets somewhat for new buyers.)

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