Citi: Microsoft Azure growth exceeds expectations at 43%, Copilot seats surpass 30 million

According to Citi’s research report dated July 30, Microsoft’s Azure cloud revenue in the fourth quarter grew 43% year-over-year, surpassing market expectations of 40% and accelerating from 39% in the prior quarter. Paid seats for Copilot reached 30 million, with a net addition of 10 million in the quarter—doubling the prior quarter’s growth. Intelligent Cloud revenue amounted to $39.3 billion, up 31% year-over-year; Productivity and Business Processes revenue reached $37.8 billion, up 14% year-over-year. Non-GAAP earnings per share for the quarter were $4.81, significantly exceeding the market expectation of $4.21. Citi believes this earnings report strongly refutes bearish views, as Azure’s accelerated growth coincides with Copilot’s scaling, validating the AI monetization thesis. Citi raised its price target from $570 to $600, maintaining a Buy rating, implying a valuation of approximately 26 times 2028 fiscal year EPS—representing about 54% upside from the current stock price of $390.