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

Microsoft on Wednesday reported better-than-expected quarterly results and issued a strong forecast for its all-important Azure cloud unit. But key debates hanging over the stock weren't put to bed, resulting in a muted reaction in extended trading. Here's a look at some of the key metrics in Microsoft's fiscal 2026 third quarter versus the Wall Street consensus: Revenue in the three months ended in March rose 18% year over year to $82.89 billion, beating the LSEG consensus estimate of $81.39 billion. Earnings per share (EPS) totaled $4.27, up 23.4% from a year earlier, topping the $4.06 consensus, according to LSEG. Azure cloud revenue growth on a constant currency basis came in at 39%, versus the FactSet consensus of 38%. On a reported basis, Azure cloud revenue was up 40%, ahead of the FactSet consensus of 39%. MSFT 1Y mountain Microsoft's stock performance over the past 12 months. Bottom line Let's call it a step in the right direction. There were some positives, led by the Azure growth guidance for the current quarter. But there were also some reminders about why Microsoft had become such a battleground stock in the first place — in particular, concerns about the viability of highly profitable seat-based software business models. With all these puts and takes, it's not surprising to see the stock oscillating between modest gains and losses in after-hours trading on Wednesday night. …