Microsoft Cloud Hits $54.5B, Now Two-Thirds of Revenue

Microsoft's cloud division grew 29% year-over-year to $54.5 billion in Q3 FY26, now representing two-thirds of total company revenue. Operating income climbed 20%, outpacing revenue growth and signaling margin expansion as Azure infrastructure utilization improves. The shift completes Microsoft's decades-long transformation from a PC software company to an enterprise cloud provider.