Apple Posts Record $111B Quarter With $100B Buyback; Microsoft Azure Climbs 40%

Apple and Microsoft capped the Mag7 earnings wave with back-to-back records that reset AI-era expectations for the rest of 2026.

🤖 Apple Q2 2026: Record $111.2B Revenue, Services Hits $31B, June Guidance Blows Out Consensus

Decoded: Apple reported fiscal Q2 2026 results after the close on April 30, posting revenue of $111.18 billion — up 17% year-over-year from $95.4 billion and a March quarter record — beating the $109.66 billion analyst consensus. EPS came in at $2.01 versus the $1.95 estimate. Services revenue reached $30.98 billion, up 16.3% and above the $30.39 billion consensus, setting an all-time quarterly record. iPhone revenue was $56.99 billion, up 22% year-over-year, slightly below the $57.21 billion estimate — the only significant miss in the report. Mac revenue of $8.4 billion beat the $8.02 billion estimate. Gross margin hit 49.3%, well above the 48.4% expected. For the June quarter, Apple guided to 14%–17% year-over-year revenue growth, far above the 9.5% analyst consensus. The board authorized an additional $100 billion in share repurchases and raised the dividend 4% to $0.27 per share. The stock rose roughly 3% in after-hours trading. It was the first earnings report since Apple announced last week that incoming CEO John Ternus will replace Tim Cook. (CNBC, Apple official Q2 FY2026 earnings release, April 30, 2026)

Why it matters: Apple's 17% revenue growth at $111 billion in a historically weaker March quarter — combined with a June guide of 14%–17% versus the 9.5% consensus — signals that the iPhone 17 demand cycle and Services monetization are running materially ahead of Wall Street models. Services at $30.98 billion growing 16.3%, combined with a 49.3% gross margin, makes it structurally the highest-margin segment of Apple's business and the most durable revenue line heading into an uncertain macro environment. The $100 billion buyback authorization confirms Apple's capital return posture is unchanged under the Ternus transition. The June guidance beat of 4.5 percentage points above consensus is among the largest quarterly guidance upside surprises Apple has issued in five years.

📊 Microsoft Q3 FY2026: Azure Grows 40%, AI Business Hits $37B Annualized Run Rate Up 123% Year-Over-Year

Decoded: Microsoft reported Q3 FY2026 results on April 29, posting revenue of $82.9 billion — up 18% year-over-year — with operating income of $38.4 billion and net income of $31.8 billion, both beating analyst estimates. Azure and other cloud services grew 40% year-over-year, ahead of the 39.3% StreetAccount consensus. Microsoft Cloud revenue totaled $54.5 billion, up 29%. CEO Satya Nadella disclosed that Microsoft's AI business surpassed an annualized revenue run rate of $37 billion in the quarter — up 123% year-over-year — making it the first hyperscaler to publicly quantify AI revenue at that scale. EPS was $4.27, up 23%. CFO Amy Hood said Microsoft expects to remain capacity constrained on GPU, CPU, and storage infrastructure through at least 2026, even with capital expenditure exceeding $80 billion for the fiscal year. (Microsoft official earnings release, news.microsoft.com; CNBC, April 29, 2026)

Why it matters: Azure at 40% growth — at a revenue base exceeding $45 billion annualized — confirms AI-driven cloud demand is sustaining double-digit acceleration despite broader macro uncertainty. The $37 billion AI annualized run rate, growing 123% year-over-year, is the first precise, publicly disclosed AI revenue figure from a major hyperscaler at this scale; it anchors how analysts will model Azure AI attach rates for the remainder of FY2026 and FY2027. The capacity-constrained commentary echoes Alphabet's identical disclosure from the same earnings week — both companies say AI demand is outrunning their ability to deploy infrastructure at $80–$190 billion annual capex levels. For Nvidia, two simultaneous compute-constrained disclosures from the two largest cloud operators in the same week are among the clearest demand signals the sector has seen.

Stay decoded. See you tomorrow.

— The Get AI Decoded Team