Microsoft’s Azure cloud-computing unit achieved another quarter of impressive growth, generating revenue that exceeded Wall Street's predictions and highlighting the increasing benefits from its substantial artificial intelligence investments.

Shares of the software firm increased by 8 percent in after-hours trading following its announcement that Azure revenue exceeded $75 billion annually marking the first time it has revealed that number, surpassing projections of $74.62 billion.

Microsoft's outcomes follow Google's announcement of increased investment in data centers to fulfill the demand for AI services, while Meta anticipated higher revenue with only slight rises in expenditures. The three outcomes may clarify investor concerns regarding whether Big Tech is profiting from its extensive data center expansion, as capital expenditures are set to hit $330 billion this year.

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Microsoft and Meta's performances contributed to a $500-billion increase in AI stocks.

Microsoft's cloud division continues to lag behind the market leader Amazon Web Services, which had an early advantage in cloud computing and generated $107.56 billion in its latest fiscal year. However, investors noted that Microsoft's updated revenue figure suggests its investments are resulting in higher sales.

“Now that Microsoft is revealing that figure, it effectively supports the significant investments,” states Dave Wagner, portfolio manager at Aptus Capital Advisors, which owns Microsoft stock.

Rival Alphabet’s earnings revealed last week that AI expenditures were increasing, but so were the profits, as it surpassed revenue predictions and raised its spending outlook by $10 billion.

Microsoft announced that Azure revenue surged 39 percent in the June quarter, exceeding the average analyst prediction of 34.75 percent, as reported by Visible Alpha.

It reported that its Copilot AI tools exceeded 100 million monthly active users, marking the first occasion it has disclosed this statistic. Google stated that competitor Gemini boasts 450 million active users.

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Revenue increased by 18 percent to $76.4 billion during the April-June time frame, which is Microsoft's fiscal fourth quarter. According to data gathered by LSEG, analysts anticipated an average of $73.81 billion.

Capital expenditures increased by 27 percent to $24.2 billion, surpassing estimates of $23.08 billion, according to Visible Alpha. Microsoft stated that the expenditure is essential to addressing supply limitations that have hindered its capacity to satisfy rising AI demand.