{"id":73780,"date":"2026-10-28T18:38:12","date_gmt":"2026-10-28T22:38:12","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/microsoft-and-fedex-post-strong-earnings-as-ai-and-data-center-demand-surge\/73780\/"},"modified":"2026-10-28T18:38:12","modified_gmt":"2026-10-28T22:38:12","slug":"microsoft-and-fedex-post-strong-earnings-as-ai-and-data-center-demand-surge","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/microsoft-and-fedex-post-strong-earnings-as-ai-and-data-center-demand-surge\/73780\/","title":{"rendered":"Microsoft and FedEx Post Strong Earnings as AI and Data Center Demand Surge"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong><a href=\"https:\/\/stockmarketwatch.com\/stock\/MSFT\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Stock: MSFT\">Microsoft<\/a> (<a href=\"\/stock\/MSFT\">MSFT<\/a>)<\/strong> reported a significant <strong>48% growth in Azure revenue<\/strong> for the first quarter of fiscal 2027, driven by intense enterprise demand for AI infrastructure.<\/li>\n<li><strong>FedEx (<a href=\"\/stock\/FDX\">FDX<\/a>)<\/strong> raised its full-year calendar 2026 revenue growth forecast to <strong>12%<\/strong>, bolstered by a <strong>28% year-over-year surge<\/strong> in international freight revenue tied to the data center vertical.<\/li>\n<li><strong><a href=\"https:\/\/stockmarketwatch.com\/stock\/MSFT\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Stock: MSFT\">Microsoft<\/a> CFO Amy Hood<\/strong> projected calendar-year capital expenditure of approximately <strong>$170 billion<\/strong>, noting that spending will accelerate in the second half of the fiscal year due to shifted third-party capacity deliveries.<\/li>\n<li><strong>FedEx&#39;s adjusted operating margin<\/strong> faced a <strong>20 basis point decline<\/strong> in Q3 due to higher fuel prices, though the company expects the fuel surcharge effect to remain neutral for the full year.<\/li>\n<\/ul>\n<h2>Microsoft Capitalizes on AI Momentum Despite Capacity Shifts<\/h2>\n<p><a href=\"https:\/\/stockmarketwatch.com\/stock\/MSFT\" data-internallinksmanager029f6b8e52c=\"18\" title=\"Stock: MSFT\">Microsoft<\/a> (<a href=\"\/stock\/MSFT\">MSFT<\/a>) delivered a robust start to fiscal year 2027, with <strong>Azure growth reaching 48%<\/strong>, exceeding the company&#39;s own prior forecasts. This acceleration underscores the successful conversion of enterprise AI interest into recurring cloud revenue. <strong>CFO Amy Hood<\/strong> highlighted that while growth remains strong, the company is navigating capacity constraints, with some third-party deliveries shifting into the second half of the fiscal year.<\/p>\n<p>The tech giant&#39;s capital expenditure strategy remains a focal point for investors. Microsoft (<a href=\"\/stock\/MSFT\">MSFT<\/a>) expects to spend roughly <strong>$170 billion<\/strong> in the current calendar year, with approximately <strong>75% of capex<\/strong> dedicated to short-lived assets like <strong>CPUs and GPUs<\/strong> to meet immediate AI compute demands. Despite this massive investment, the company maintains it will remain <strong>cash flow positive<\/strong> through fiscal 2027 and may access additional funding sources if market conditions prove attractive.<\/p>\n<p>In the productivity segment, <strong>paid Microsoft 365 commercial seats<\/strong> grew by <strong>5%<\/strong>. However, management noted that this result was somewhat tempered by <em>weaker sales execution<\/em>. Looking ahead to the second quarter, Microsoft (<a href=\"\/stock\/MSFT\">MSFT<\/a>) anticipates <strong>Agents and Infrastructure revenue<\/strong> to fall between <strong>$80.1 billion and $80.7 billion<\/strong>, though commercial bookings may see year-over-year comparisons impacted by large Azure contracts signed in the previous period.<\/p>\n<h2>FedEx Rides the Data Center Wave to Higher Guidance<\/h2>\n<p>FedEx (<a href=\"\/stock\/FDX\">FDX<\/a>) reported a strong third quarter, leading the logistics leader to raise its calendar 2026 adjusted EPS guidance to a range of <strong>$18.00 to $18.60<\/strong>. The company&#39;s performance was significantly boosted by the global build-out of AI infrastructure, as <strong>data center-related business<\/strong> fueled a <strong>28% increase<\/strong> in international freight revenue. This specialized demand is helping FedEx (<a href=\"\/stock\/FDX\">FDX<\/a>) offset broader economic volatility and shifting trade policies.<\/p>\n<p>While revenue grew <strong>12% year-over-year to $22.9 billion<\/strong>, the company&#39;s <strong>interim CFO Claude Russ<\/strong> noted that the adjusted operating margin was pressured by a <strong>30 basis point headwind<\/strong> from rising fuel prices. Despite this, the company&#39;s &quot;Network 2.0&quot; optimization efforts and higher package yields helped mitigate costs. FedEx (<a href=\"\/stock\/FDX\">FDX<\/a>) remains optimistic about the final quarter of the calendar year, with its forecast implying <strong>10% revenue growth for Q4<\/strong>.<\/p>\n<p>The quarter also marked a period of significant capital activity for FedEx (<a href=\"\/stock\/FDX\">FDX<\/a>), which completed <strong>$2 billion in share repurchases<\/strong> between June and September. As the company transitions to a new fiscal calendar and prepares for the leadership of incoming <strong>CFO Jamere Jackson<\/strong> in late November, it continues to focus on high-margin verticals like healthcare and technology to drive long-term profitability.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Microsoft (MSFT) reported a significant 48% growth in Azure revenue for the first quarter of fiscal 2027, driven [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":50383,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"rank_math_schema_Article":[],"rank_math_focus_keyword":[],"rank_math_description":[],"financial_data_references":[],"stock_symbols_mentioned":[],"footnotes":""},"categories":[5012],"tags":[33,1032,1807,4544,4545,6086],"class_list":["post-73780","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-breaking-news","tag-msft","tag-fdx","tag-earnings","tag-ai-infrastructure","tag-cloud-computing","tag-logistics"],"_links":{"self":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts\/73780","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/comments?post=73780"}],"version-history":[{"count":0,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts\/73780\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/media\/50383"}],"wp:attachment":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/media?parent=73780"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/categories?post=73780"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/tags?post=73780"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}