TLDR
- Microsoft is restructuring from three reporting segments to two: Agents and Infra, and Devices and Consumer
- Azure quarterly revenue will be disclosed in dollars for the first time, ending years of percentage-only reporting
- Azure hit $29.4 billion in revenue in the June quarter, growing 42%, with annual sales topping $100 billion
- The new reporting structure takes effect with Q1 fiscal results in October 2026
- Wall Street holds a Strong Buy consensus on MSFT with an average price target of $568.31, implying 14% upside
Microsoft is making its biggest structural change since 2015, and investors are finally getting the Azure revenue numbers they have been asking for.
The company announced Wednesday it will start reporting Azure revenue in actual dollars on a quarterly basis. Previously, Microsoft only disclosed the year-over-year growth rate, with annual dollar figures only becoming available recently. That left analysts doing a lot of guesswork on one of the most closely watched cloud businesses in the world.
Azure generated $29.4 billion in revenue in the June quarter, up 42% year over year. On an annual basis, Azure crossed $100 billion in sales for the fiscal year ended June, up from $75 billion the prior year.
To put that in context, Azure now accounts for around 30% of Microsoft’s total revenue. It sits behind Amazon’s AWS, which posted $42.2 billion in quarterly cloud sales, but ahead of Google Cloud at $24.8 billion.
Two New Segments Replace Three Old Ones
Microsoft is cutting its operating segments from three to two. Out go Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. In come Agents and Infra, and Devices and Consumer.
Agents and Infra will bundle Azure, Microsoft 365 cloud products, productivity and server licensing, and frontier services. Devices and Consumer covers Xbox, search and advertising, Windows OS licensing, and device sales.
One change worth noting: Azure under the new structure will exclude GitHub cloud services, Security Copilot, and healthcare cloud products. Those had previously been grouped in with Azure growth figures.
AI Is Driving the Restructure
CEO Satya Nadella said the change reflects how AI is reshaping the business. “It is changing what we build and how we operate, and it is blurring the boundaries between our products,” he wrote in the announcement presentation.
Analysts at Stifel estimated roughly half of Azure’s revenue growth in fiscal 2026 came from OpenAI. Anthropic has also increased its reliance on Microsoft’s cloud infrastructure.
The Agents and Infra segment will also highlight Microsoft’s AI assistant lineup. The company said in July it had over 30 million paid seats for Microsoft 365 Copilot, up from more than 20 million in April.
For Q1 fiscal 2027, management guided Azure revenue growth of 44% to 45% at constant currency. The company is targeting $75.15 billion to $75.75 billion in Agents and Infra revenue and $14.7 billion to $15.2 billion for Devices and Consumer.
Microsoft is providing two years of recast financial results alongside the new structure. Overall revenue guidance and cost outlooks remain unchanged.
The new segments go live when Microsoft reports its fiscal first-quarter results in October 2026. On TipRanks, MSFT carries a Strong Buy consensus rating based on 32 Buy ratings and one Hold over the last three months, with an average price target of $568.31.
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