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Microsoft Profit Surges as Cloud Revenue Tops Expectations · Global Advisors Daily Business News

• 0:10
  Welcome to Global Advisors Daily Business News. I'm Sam. Today is Thursday, the twenty-ninth of October 2026. Let's explore today's business headlines and what they mean for leaders. Please hit like and subscribe for daily updates if you find this useful.
• 0:29
  Microsoft opened its 2027 fiscal year with substantial expansion across its core operations, driven by accelerating customer demand for enterprise cloud and artificial intelligence systems. For the fiscal first quarter, the company reported that net income based on generally accepted accounting principles increased thirty-two percent to 36.6 billion dollars.
• 0:50
  On a non-GAAP basis, quarterly net profit advanced eighteen percent to 36.4 billion dollars, or nineteen percent after adjusting for currency fluctuations.
• 1:01
  A crucial breakthrough for market visibility arrived with Microsoft's decision to disclose standalone dollar revenue for Azure for the very first time. The Azure cloud business brought in 33.17 billion dollars during the quarter. That figure surpassed Wall Street expectations compiled by StreetAccount, which had anticipated 32.32 billion dollars.
• 1:21
  The performance marks a clear pickup from the forty-two percent growth rate reported in the June quarter, even as the company navigated delivery delays from third-party hardware suppliers.
• 1:32
  Yet behind those expanding topline figures sits a broader industry challenge: the immense cash cost of building out advanced technical infrastructure. Microsoft recorded a twenty-seven percent decline in quarterly free cash flow, which fell to 18.63 billion dollars. Even with that contraction, Microsoft maintained positive cash generation, outperforming key rivals.
• 1:53
  Alphabet posted negative free cash flow exceeding nine billion dollars in its recent quarter, while Meta saw its cash flow turn negative for the first time.
• 2:02
  Looking ahead, Chief Financial Officer Amy Hood affirmed that Microsoft expects to generate positive free cash flow throughout the full 2027 fiscal year. However, Hood signaled that leadership will look to tap outside financing when attractive opportunities arise. With top-tier credit ratings, the company is prepared to enter the corporate debt markets or explore other funding mechanisms to sustain its heavy capital investments.
• 2:31
  In an extraordinary turn of events for the legal sector, the leadership of premier Wall Street law firm Weil, Gotshal and Manges has advised its partners to pursue an orderly wind-down. The recommendation follows high-profile partner exits and the breakdown of potential merger talks designed to secure the firm's future.
• 2:48
  Weil's management committee released a statement noting that after advising clients on critical matters for more than ninety years and conducting a thorough evaluation of strategic options, leadership has recommended winding down operations. The announcement signals the likely dissolution of a prestigious institutional pillar of the American corporate bar.
• 3:08
  This potential closure represents a remarkably swift reversal of fortune. Weil generated 2.1 billion dollars in revenue just last year, supported by a ninety-five-year history of leading major restructurings. Most famously, Weil served as lead debtor counsel during the 2008 bankruptcy of Lehman Brothers, the largest Chapter 11 filing in United States history, which encompassed roughly 630 billion dollars in assets.
• 3:32
  The firm's vulnerability became acute in September, when prominent dealmaker Michael Aiello left alongside his practice group to join Cravath, Swaine and Moore. Subsequent merger negotiations with rival firm Willkie Farr and Gallagher, which would have formed a global legal titan producing over four billion dollars in annual revenue, ultimately collapsed.
• 3:52
  The breakdown of those discussions triggered a broader exodus as partners began exploring opportunities with competing practices.
• 3:59
  Despite this destabilizing outflow of talent, Weil employs twelve hundred lawyers globally and reportedly remains free of debt with relatively modest liabilities. The firm is actively collecting outstanding client billings, leaving open the possibility of completing an orderly wind-down without seeking bankruptcy protection, which could help its lawyers recover unpaid earnings.
• 4:25
  Federal Reserve Chair Kevin Warsh has announced an overhaul of how the central bank structures its annual policy schedule. While the Federal Open Market Committee will continue to gather eight times per year, policymakers will reduce the frequency of their interest rate votes, casting ballots at only seven meetings in 2027 and six meetings in 2028.
• 4:45
  The sessions removed from the voting roster will be dedicated solely to broad, long-term monetary policy strategy. Warsh clarified that these strategy gatherings are not expected to include benchmark interest rate votes or formal policy statements, establishing dedicated time away from immediate market pressures.
• 5:03
  This operational adjustment breaks with an eight-vote annual rhythm that the twelve-member committee has followed since the 1980s. Warsh defended the move by arguing that while evaluating high-frequency economic data remains critical, central bankers must also secure deliberate space to think anew about structural economic issues over longer horizons.
• 5:23
  The change has drawn divided reactions across the economic community. Critics warn that fewer voting opportunities could slow the Fed's ability to react to sudden shifts in inflation or labor market conditions, while reinforcing concerns that the central bank is sharing less frequent guidance with the public.
• 5:40
  Conversely, supporters contend that wider gaps between rate decisions will help officials identify genuine economic trends without overreacting to short-term data noise, pointing out that emergency meetings remain available if sudden crises emerge.
• 6:00
  Turning to the central bank's immediate policy action, the Federal Open Market Committee voted on Wednesday to maintain its benchmark federal funds target range at 3.75 to 4.00 percent. The decision to hold rates was approved by a ten to two majority while preserving the central bank's policy of maintaining ample reserves in the financial system.
• 6:21
  The vote was accompanied by notable internal dissent. Federal Reserve Governor Lisa Cook and Cleveland Fed President Beth Hammack broke with the majority, voting instead for an immediate quarter-point interest rate increase. Their stance underscores lingering concern inside the committee that borrowing costs may need to remain tighter for longer.
• 6:40
  In its formal statement, the Fed upgraded its assessment of the United States economy, describing overall expansion as strong. The committee specifically cited resilient domestic spending, robust capital investment, and strong productivity growth, noting that job gains continue to match workforce expansion while unemployment has remained steady, even as geopolitical uncertainties persist.
• 7:02
  At the same time, policymakers explicitly reiterated that inflation remains elevated, hinting that additional rate increases could still be required depending on future price data.
• 7:13
  This hawkish caution comes against a challenging backdrop: the Federal Reserve has now missed its two percent inflation target for five and a half years, stirring fears among some officials that businesses and consumers could permanently build elevated price expectations into their planning.
• 7:28
  In his post-meeting news conference, Chair Warsh offered a balanced perspective on growth, stating that the American economy is pointing in the right direction. Warsh explained that the economy is not running too hot despite demand pressures stemming from artificial intelligence investments, adding that the central bank's purpose is not to impede economic expansion.
• 7:53
  Energy markets experienced fresh upward pressure on Wednesday as geopolitical risks resurfaced in the Persian Gulf. In early trading, Brent crude futures rose 1.3 percent to 115.36 dollars per barrel, while West Texas Intermediate advanced 1.22 percent to 101.12 dollars per barrel.
• 8:12
  The price rally reversed a decline of nearly two dollars seen on Tuesday, when regional diplomatic discussions had temporarily alleviated supply concerns. Market participants pushed crude prices higher despite analyst survey expectations collected by Reuters that pointed toward a fifteen-thousand-barrel increase in United States crude stockpiles.
• 8:32
  The catalyst for the market move was an announcement from Yemen's Houthi forces claiming a missile attack against Saudi Arabia's principal oil refinery at Ras Tanura. Houthi military spokesperson Yahya Saree stated that the strike caused a fire at the expansive complex, which includes major marine shipping infrastructure west of the Strait of Hormuz.
• 8:52
  Ras Tanura represents a critical bottleneck for global energy markets, processing 550,000 barrels of oil per day. Alongside the Red Sea facility at Yanbu, it serves as one of two main export channels handling nearly all Saudi crude shipments.
• 9:07
  While Saudi authorities did not immediately confirm a missile impact on the processing plant, Bloomberg News reported that local emergency crews managed to contain a fire in the vicinity of the Ras Tanura terminal.
• 9:20
  The maritime incident coincided with broader aerial engagements over the kingdom. Saudi defense forces intercepted two ballistic missiles launched by the Houthis toward Riyadh, with falling debris causing material damage to a local building, a construction site, and a vehicle.
• 9:35
  That's it from me, Sam. Thanks for listening. Follow the show on Spotify, YouTube, Apple Podcasts, Amazon Music, or your favourite podcast platform, and join our WhatsApp channel for free updates. Until next time.