Microsoft AI Surge Persists Amid Capex Fears and Shares Dip

Microsoft's Q3 FY2026 earnings highlighted accelerating AI and cloud demand, with revenue of $82.9B (+18% YoY), Azure up 40% YoY, and AI business at $37B run rate (+120% YoY). Commercial RPO doubled to $627B, but shares slid intraday on heavy CapEx ($30B+ quarterly, $44B Q4 forecast) dragging free cash flow to $15.8B and margins. Analysts reaffirm Strong Buy at $738 target, eyeing paradigm shift despite near-term pressures.