Microsoft reported a strong fiscal Q4 2026, with CEO Satya Nadella highlighting the company’s in-house AI chips as a key driver of performance gains and investor enthusiasm. Nadella said Microsoft’s custom silicon improved inference throughput (speed of AI responses) for Copilot models by 40%, and the company said its Maia 200 AI accelerator delivered more than 30% better tokens per dollar than the hardware it previously used. Microsoft shares rose more than 8% in after-hours trading after the results. The quarter also underscored the scale of Microsoft’s AI buildout: Azure revenue increased 43% year over year in the quarter ended June 30, 2026, and the company’s AI business reached an annual recurring revenue run rate above $37 billion, up 123% from a year earlier. Microsoft said it is still working with Nvidia and AMD, reflecting a multi-vendor approach even as it expands its own chip program. That expansion remains capital-intensive, with about $41 billion spent on AI infrastructure capital expenditures during the quarter.