Microsoft Earnings Hit $81B On Cloud And AI Surge To Offset Big Dip In Xbox Hardware

Microsoft's earnings for the second quarter of its 2026 fiscal year managed to top expectations on Wall Street, with the Redmond outfit reporting $81.3 billion in revenue, which is a 17% increase from the same period in the prior year. The bulk of the revenue came from its Cloud business, leading to an overall net profit of $30.9 billion (non-GAAP basis) for an even bigger 23% year-over-year gain.

The impressive results come as Microsoft makes a concerted effort to integrate AI into practically every facet of its business, While this has been a point of consternation among consumers who have grown tired with constant chatter about AI, the strategy is clearly paying off, at least for now.

"We are only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises," said Satya Nadella ...