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Microsoft ($MSFT) shares jumped after the company delivered a stronger-than-expected fiscal first quarter, putting the stock on pace for its best session in more than three months. Deepwater Asset Management’s Gene Munster said the results suggest traditional software demand remains stronger than expected despite growing concerns that AI agents could disrupt the sector. “Software is alive and well, at least for now,” Munster said, pointing to 17% growth in Microsoft 365 commercial cloud revenue and saying software growth is actually accelerating rather than weakening. Microsoft reported revenue of $92.3 billion, up 19% year over year and marking its fastest growth rate since late 2021. Adjusted earnings came in at $4.89 per share. Microsoft Cloud revenue climbed 30% to $63.9 billion, while Azure revenue surged 48% to $33.17 billion and exceeded expectations. The company’s commercial backlog reached $677 billion, up 73%, while free cash flow totaled $18.6 billion despite $45.2 billion in quarterly capital spending. Microsoft also guided Azure growth to 49% to 50% for the December quarter, reinforcing expectations that cloud and AI infrastructure demand remain strong. Munster remains cautious longer term, arguing that AI could eventually become a headwind for Microsoft’s software business as automation reduces knowledge-worker demand. For now, though, he said the latest quarter shows software growth is still holding up better than expected.

Microsoft is cutting OneDrive storage for Microsoft 365 Family and Premium users from 6TB to just 2TB shared between everyone, users are not happy and they are cancelling the subscription Previously, each of the six people on a family plan could get 1TB of storage. Now, everyone has to share the same 2TB limit. That’s a 66% reduction in total storage for families using all six accounts. Microsoft says the change gives users more flexibility >New subscriptions already use the shared 2TB limit. >Existing subscribers will move to the new limit when their subscription renews on or after May 2, 2027. >Families using more than 2TB combined may need to delete files or pay for extra storage. >Microsoft is also expanding Copilot AI benefits to other members of the family plan.

Microsoft 365 Family subscribers are set to lose up to 4TB of included OneDrive storage, reducing the plan's maximum shared storage from 6TB to 2TB. The company frames the change positively, saying it automatically allocates storage to users who need it most, but many users are reacting differently.

Microsoft has delayed its plan to enable usage-based billing by default for new Microsoft 365 Copilot Business subscriptions purchased through the Cloud Solution Provider (CSP) program while also providing more details on the plan, which could affect what AI products and services customers use and how customers use them. Originally set to start Nov. 2, usage-based billing (UBB) by default is now set to start Dec. 1. Here’s what you need to know:

Microsoft $MSFT price target raised to $610 from $550 at Piper Sandler Piper Sandler analyst Billy Fitzsimmons raised the firm's price target on Microsoft to $610 from $550 and keeps an Overweight rating on the shares. The firm upped the target to reflect Microsoft's "Super App" announcement, uplift from the new E7 enterprise licensing plan, and the growing contribution of consumption-based pricing to Copilot and Cowork. Piper says every 10% shift of seats from E5 to E7 drives a $2B annualized revenue uplift. The firm also sees a path to new Copilot and Cowork consumption revenue scaling to a $2B annualized run rate by fiscal 2028. Piper now has increased confidence in Microsoft 365's outlook.

MICROSOFT TO START DISCLOSING AZURE REVENUE $MSFT is overhauling FY27 reporting, moving from 3 segments to 2: Agents & Infrastructure and Devices & Consumer. FY27 Q1 outlook: Azure growth: +44%-45% CC Agents & Infra revenue: $75.15B-$75.75B Devices & Consumer: $14.7B-$15.2B Microsoft 365 Commercial Cloud: ~17% CC Search & Ads ex-TAC: mid-to-high single digits Microsoft had used its previous three-segment structure since FY2016.

Microsoft is turning Copilot into one unified “super app.” The company is merging the regular Copilot app with Microsoft 365 Copilot, with AI chat, image creation, and Microsoft 365 features together instead of making users switch between separate apps. Microsoft says the unified app is also the foundation for a larger Copilot “super app” that it plans to expand later this year.

Microsoft is getting huge backlash from users for introducing a persistent floating Copilot button in Excel and other Microsoft 365 apps. The button sits inside the worksheet, reducing usable workspace. Microsoft added it to make Copilot easier to access, but many experienced users dislike it. They prefer a clean spreadsheet. You can right-click the button and choose “Dock” to make it small on the side, but the full button returns when used. There is no way to hide it permanently. To manage or remove the button: >Open File > Options > Copilot. >Select “Show Copilot icon only for highly relevant suggestions” to hide the floating button unless the AI detects a strong match. >Uncheck “Enable Copilot” to disable the feature and remove the button. Enterprise administrators can control this through organization-wide settings or by disabling connected experiences.

Microsoft 365 Copilot will proactively accept and decline meetings with your input, so you can spend the extra time preparing for your meetings instead of managing them on your calendar.