Microsoft delivers a promising quarter but can't shake the software fears

microsoft beat on both revenue and earnings in its fiscal q3. revenue hit $82.89 billion, up 18% year over year, beating the $81.39 billion consensus. eps was $4.27, up 23.4%, topping the $4.06 estimate. azure cloud revenue grew 39% on a constant currency basis, just ahead of the 38% consensus. the stock barely moved in after-hours trading. the big debates about microsoft's business model — especially the viability of seat-based software licenses in an ai world — weren't resolved. ceo satya nadella argued for a hybrid model, but the q&a session spent a lot of time on consumption vs. seat-based pricing. for the current quarter, microsoft guided azure growth between 39% and 40%, well above the 37% consensus. total revenue guidance of $86.7 billion to $87.8 billion came in slightly below the $87.56 billion estimate. capex is expected to hit about $190 billion in calendar 2026, up from roughly $118 billion in 2025. paid copilot seats passed 20 million, up from 15 million in january.