Microsoft (MSFT)'s fiscal first-quarter earꦛnings beat analysts' expectations as the company's Azure cloud computing segment grew more than predicted.

The tech titan's net income came in at $22.3 billion, up 27% year-over-year. Adjusted earnings per share were $2.99. Revenue climbed by 13% on a YOY basis to $56.5 billion as Microsoft's cloud business provided an unexpected boost.

Microsoft's cloud business, Azure, grew sales significantly more than the 26% investors had predicted. The 29% jump was fueled by the company's consumption-based services, Microsoft said. This is the first time the segment has shown growth in two years.

The companyܫ is optimistic about the long-term prospects of its Azure business, as it expects revenue in this segment to continue its acceleration in the rest of the fiscal year.

Microsoft has quickly and decisively shifted its focus to encompass a variety of AI-based offerings in the last year. In Jan. 2023, the company announced a $10-billion investment in OpenAI, the maker of the popular ChatGPT large language model.

Just weeks later, the company unveiled new versions of its Bing search engine and Edge browser, both now powered by AI. Since then, Microsoft has released AI-based apps supporting a number of its other products as well.

Also affecting future earnings will be Microsoft's recently completed acquisition of video game publisher Activision Blizzard for $69 billion earlier this month after close to two years of regulatory scrutiny.

Shares of Microsoft are up 34% in the last year, and are just shy of the stock's all-time high price. Shares were up more than 4% in after-hours trading.