Despite these advancements, Microsoft faces stiff competition in the agentic AI space from Amazon and Alphabet, both of which are enhancing their own AI tools and platforms.

A remarkable surge in custom agents created across Microsoft platforms has been observed, exceeding 1 million, which reflects a staggering 130% increase quarter over quarter.

In the third quarter of fiscal 2025, Microsoft's Intelligent Cloud segment generated $26.8 billion in revenue, marking a 21% year-over-year increase and accounting for 37.9% of the company's total revenues.

Microsoft is significantly expanding its Azure platform and AI services to cater to the rising demand for intelligent tools and automation, with over 10,000 organizations utilizing its Agent Service in the third quarter of fiscal 2025.

The integration of the newly introduced MU language model is anticipated to boost the adoption of Azure's AI services, leading to increased cloud consumption as more organizations leverage these capabilities.

Year-to-date, Microsoft's share price has risen by 17.7%, outperforming industry averages, with a forward Price/Sales ratio of 11.70, surpassing the industry average of 9.59.

During the same quarter, Microsoft processed over 100 trillion tokens, showcasing a remarkable fivefold increase year over year.

Forecasts indicate that the Intelligent Cloud segment's revenue will reach approximately $105.3 billion in fiscal 2025, representing a 20.4% growth compared to the previous year.

The MU language model enhances the AI agent in Windows 11 Settings, enabling users to interact with system settings using natural language, which exemplifies the practical applications of Azure AI services.

The Zacks Consensus Estimate for the fourth-quarter fiscal 2025 earnings stands at $3.35 per share, suggesting a year-over-year growth of 13.56%, while the fiscal 2025 earnings estimate is projected at $13.36 per share, indicating a growth of 13.22%.

Azure and other cloud services experienced impressive growth of 33%, with AI services contributing significantly, accounting for 16 percentage points of that increase.