Why Microsoft (MSFT) Stock Is Up Today

What Happened?

Shares of tech giant Microsoft (NASDAQ:MSFT) jumped 4.5% in the afternoon session after the company reported impressive fiscal fourth-quarter earnings that surpassed analyst expectations, fueled by significant growth in its cloud and artificial intelligence divisions. 

The tech giant's Intelligent Cloud segment saw revenue increase by 26% to $29.8 billion, with its Azure cloud platform leading the charge. Management highlighted strong customer adoption of AI-powered services. 

Notably, Microsoft revealed that Azure and its associated cloud services brought in over $75 billion in the past fiscal year, marking a 34% increase from the previous year. In a clear indication of its commitment to AI, Microsoft announced plans to invest over $30 billion in capital expenditure in the next quarter alone to enhance its AI infrastructure. Overall, this was an impressive quarter. 

After the initial pop the shares cooled down to $536.42, up 4.4% from previous close.

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What Is The Market Telling Us

Microsoft’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 10.4% on the news that the company reported strong first-quarter 2025 results, with revenue and operating income both beating Wall Street estimates, driven by surging demand for cloud and AI services, signaling resilient enterprise spend amid broader tech budget scrutiny. 

Sales rose 13%, supported by broad-based strength across all business segments. While Productivity and Business Processes grew 10% and More Personal Computing rose 6%, the standout performance in Azure tipped the scales, thanks to increased customer adoption of AI workloads and infrastructure​. 

The bottom line was equally strong. Operating income climbed 16%, outpacing revenue growth, with operating margins expanding across all three segments. This margin strength helped boost net income, pushing earnings past analysts' estimates. Overall, this was a solid quarter with key areas of upside.

Microsoft is up 28.1% since the beginning of the year, and at $536.42 per share, has set a new 52-week high. Investors who bought $1,000 worth of Microsoft’s shares 5 years ago would now be looking at an investment worth $2,616.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.