Microsoft posted strong Q2 2025 earnings, beating expectations with robust cloud and AI growth, though it faces challenges in maintaining its Cloud segment's rate of growth.

“We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead," Microsoft CEO Satya Nadella said in a statement. “Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year.”

It recently reported its fiscal Q2 2025 earnings. The stock tanked by 4% but started recovering immediately and is now down by 2% after earnings. Let’s take a look into what happened.

Microsoft anticipates revenue growth in Intelligent Cloud and Productivity, leading to overall organic revenue growth. Click to read why MSFT is a Strong Buy.

Microsoft’s earnings report for Q2 2025 was published at the close of markets today. Microsoft tallied $69.9 billion in revenue for the quarter, which beats the expectation of $68.8 billion. Microsoft’s $3.23 per share clears the $3.11 expectation.

Microsoft fell in afterhours trading Wednesday after the tech giant's fiscal second-quarter results beat Wall Street estimates, but growth in its key cloud business fell short of expectations.