CNBC reported that Microsoft disclosed Azure revenue in dollars in an earnings statement for the first time: $33.17 billion, up 48%, versus the StreetAccount estimate of $32.32 billion. Azure growth was 42% in the June quarter. Free cash flow was $18.63 billion, down 27% from a year ago, and capital expenditures including finance leases were $45.2 billion, up about 30%, versus a StreetAccount projection of $50.67 billion. Microsoft also reported under two operating segments for the first time since 1998. Shares rose about 5% in extended trading.
24/7 Wall St.'s live coverage listed total cloud revenue of $63.9 billion (up 30%) and commercial remaining performance obligations of $677 billion (up 73%), and noted shares were initially up about 4% after the report.
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What Options Were Pricing
Before the report, Investopedia said options pricing implied a move of up to about 4.5% in either direction by the end of the trading week, from a share price around $528. 24/7 Wall St. cited at-the-money implied volatility of about 70.8% on the October 30 expiration and a put/call ratio of 0.73 earlier in the afternoon. An after-hours gain of roughly 4-5% is close to that implied range, so the move so far is not far outside what the market priced. After-hours prices can change before the regular session opens.
Why This Matters for Options Traders
1. IV crush is the default after the event. With results out, the earnings premium in near-dated options typically deflates at Thursday's open. Long calls bought before the report can gain less than the stock move suggests, and short-premium positions can benefit from the drop in implied volatility even when the stock moves. See our IV crush explainer.
2. The conference call can still move the stock. Guidance, especially commentary on Azure growth and capital spending, often comes on the call rather than in the release, so the after-hours move can grow, shrink or reverse.
3. Read-across to the AI and cloud trade. Microsoft reported on the same evening as Alphabet, whose shares fell after its results. Options on cloud peers and AI-infrastructure names can reprice on both reports at once.
4. Post-earnings drift. Some traders study whether a stock keeps moving in the direction of a surprise for days afterward. Our post-earnings drift guide covers the evidence and risks.
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By the OptionsPilot Editorial Team. Published October 28, 2026, 1:30 PM PT. This article is for education only and is not investment advice. Options involve risk and are not suitable for all investors.
