Azure passes $100 billion in annual revenue as demand outruns capacity

Microsoft's Azure business crossed $100 billion in annual revenue, growing 43%, and management guided to roughly 45% constant-currency growth. The bigger figure is commercial RPO, which rose 84% to $678 billion. That is a contracted backlog well beyond what Microsoft can currently serve.

Microsoft added 31 data centers in a single quarter and plans $220.7 billion in full-year capex. It also expanded sovereign-cloud offerings with confidential computing for AI workloads. That targets regulated European and government customers who need guarantees about where data sits and who can see it.

Taken with AWS's 'sold out through 2027' and Google's warning of shortages into 2027, the three largest clouds all report demand exceeding supply. Analysts at 24/7 Wall St. frame it as a $700 billion moat built through 2030. They also ask whether growth can justify a ballooning AI budget.

Watch margins and depreciation. Spending at this scale front-loads costs, so investors will be looking for whether AI revenue converts at the rates the backlog implies.