Microsoft's Azure growth and strong cash flow ease AI spending worries

Microsoft's Azure cloud business grew 48% in the September quarter, while free cash flow reached $18.6 billion, easing investor concerns over mounting AI infrastructure spending. The results, reported Wednesday, beat market expectations by roughly $10 billion in cash flow and drove shares up over 3% in after-hours trading. This contrasts with rivals Alphabet and Meta, whose heavy AI investments have squeezed cash flow and increased borrowing. Microsoft's performance highlights its advantage in capitalizing on corporate AI demand, with ties to OpenAI generating $10 billion in quarterly revenue. Its shares have risen about 9% this year, trailing the S&P 500's 13% gain.