Microsoft will begin reporting quarterly revenue from its Azure cloud business directly, rather than disclosing only the growth rate, as part of a change in its corporate reporting structure. The company said it will reduce its reporting segments from three to two: Agents and Infra, described as focused on artificial intelligence, and Devices and Consumer.
Azure has been a key driver of sentiment in Microsoft shares. When the cloud unit's growth rate has been strong, the stock has tended to rally, while concerns about its pace have contributed to pullbacks, including earlier this year when Azure growth slowed. In July, Microsoft shares rose sharply after the company reported results that included Azure growth better than expected.
The new structure is expected to place more emphasis on AI-related revenue. Microsoft has been investing heavily in AI, and the company's Azure business has benefited from that spending. By disclosing Azure revenue more directly, the company is giving investors a more direct view of performance in areas tied to its AI strategy.
Agents and Infra is expected to be the larger of the two segments. Its projected revenue for the first quarter of fiscal 2027 is expected to be above $75 billion, compared with about $15 billion for Devices and Consumer.
Microsoft shares have risen since the July earnings release. The stock is trading at about 28 times trailing earnings, compared with 38 times earnings for Apple.
