Microsoft reported double-digit growth in both revenue and profit for the first quarter of its 2026 fiscal year. However, its cloud computing arm, Azure, encountered growth limitations stemming from capacity constraints. During this quarter, Microsoft's total revenue soared to $77.7 billion, with Azure and other cloud services witnessing a 39% increase. Capital expenditures also soared to a record high of $34.9 billion. The robust performance was largely propelled by a strong demand for AI platforms and Copilot series offerings. Microsoft Cloud's revenue surpassed $49 billion, while commercial remaining performance obligations (RPO) skyrocketed by over 50%, nearing the $400 billion mark. In response to the surging demand, Microsoft is aggressively investing, aiming to double its data center capacity within the next two years and deploying advanced technologies such as NVIDIA GB300 clusters. Despite these efforts, a capacity shortfall persists, prompting Microsoft to prioritize computing resources for its highest-priority ventures. Investors raised concerns over a potential 'AI bubble' and the associated investment risks. Microsoft, however, underscored that RPO reflects genuine market demand and that its capital expenditure approach remains judicious. Additionally, Microsoft inked a new deal with OpenAI, securing an additional Azure services contract valued at $250 billion—a roughly tenfold surge in investment value. Nevertheless, the partnership also carried certain financial repercussions, as Microsoft accounted for its share of OpenAI's losses this quarter, resulting in a hit under the 'Other Income and Expense' category. Throughout the Q&A session, Microsoft tackled inquiries regarding stock price trends, the implications of Artificial General Intelligence (AGI), customer concentration risks, and other pertinent matters. The company reiterated its dedication to constructing AI-driven systems that deliver value to customers and pursuing sustainable, long-term growth.