Microsoft on the cusp of $4 trillion in value: huge investment in AI has started to pay off

Shares of technology giant Microsoft rose more than 8% in extended trading on July 30 - after the company reported a highly successful quarter and disclosed revenue for its Azure cloud service for the first time. If such gains continue in mainstream trading on July 31, Microsoft will become only the second publicly traded company in history with a capitalization above $4 trillion.

Microsoft's stock price at the postmarket on Wednesday, July 30, rose by more than 8% - reaching about $556. If such a price remains at the main trades on July 31, it will become a record for the company's securities in the history of their circulation on the exchange. Now the maximum is $518.29 (or $513.71 at closing), it was set on July 25.

The company's capitalization reached $4.1 trillion in extended trading on July 30 - the first time in the company's history, reported CNBC. When the main session opens on July 31, Microsoft could be the second publicly traded company in history to be worth more than $4 trillion, a bar that has so far been conquered only by artificial intelligence processor maker Nvidia.

The main trading on July 30 ended slightly up 0.13% - to $513.24.

Revenues at Microsoft rose 18% - to $76.4 billion in the fourth quarter of fiscal 2025 ended June 30, according to reports from the company. That's the fastest sales growth in more than three years, reported CNBC. Revenue beat expectations: analysts were looking for $73.81 billion, according to LSEG. Adjusted earnings per share also came in better than forecast: $3.65 (up 24% year-over-year) versus $3.37.

Microsoft has revealed for the first time the revenue of its Azure cloud platform (sells computing power and related services) in monetary terms: it grew 34% in fiscal 2025 to more than $75 billion, CEO Satya Nadella said, he was quoted as saying. That puts Azure in second place among the largest cloud platforms - behind Amazon Web Services but before Google and Oracle, wrote Bloomberg.

Azure's revenue growth suggests Microsoft is starting to reap the benefits of its huge investment in AI - perhaps the most generous in the market - in the form of rising sales, the agency noted. Microsoft's capital spending last quarter totaled $24.2 billion - a record. Analysts had predicted about $23 billion, reported The Wall Street Journal. Capex will exceed $30 billion in the current period, said Executive Vice President and Chief Financial Officer Amy Hood, quoted by Bloomberg.

Revenue for Microsoft's entire cloud business added 27% to $46.7 billion in the fourth quarter, Hood said. Azure and other cloud services had the best quarterly growth of any of Microsoft's businesses, up 39%. Analysts surveyed by StreetAccount and CNBC had forecast Azure growth of 34.4% and 35.3%, respectively. Investors appeared pleased with the accelerating growth of Microsoft's cloud business, which led to a sharp rise in the stock price, noted Bloomberg.

The company also beat expectations in the Productivity and Business Processes (includes Office products) and More Personal Computing (Windows operating system and search advertising) segments. Artificial intelligence helped boost sales: according to the company, the rollout of the Microsoft 365 Copilot assistant led to an increase in revenue per user for Microsoft 365 commercial products, including sales of the Office suite of applications, CNBC reported.

Microsoft's forecast for the current quarter beat analysts' estimates, Bloomberg noted, but did not provide specific numbers.

Azure's strong growth last quarter could "allay investor concerns about increased capital spending" by Microsoft, Bloomberg Intelligence analysts Anurag Rana and Andrew Girard wrote in a note. "We expect this to give Microsoft more reason to increase investment in its AI business, with spending likely to be directed more toward short-term assets such as servers and GPUs," they said.

Microsoft showed a "slam dunk quarter" (a term from basketball where a player dunks the ball with one or both hands from top to bottom in a jump shot) that confirmed the company is capitalizing on the AI wave, Wedbush analyst Dan Ives told Wedbush in a presentation to MarketWatch. Microsoft's "aggressive investment" in providing leadership in the AI market is starting to pay off financially, Ives added.

Microsoft shares have gained 22% since the beginning of 2025, almost three times as much as the S&P 500 index (+8.2%). The company's securities have 64 recommendations from analysts, and almost unanimously they advise buying (50 ratings Buy and nine Overweight -  "above market"), shows MarketWatch. The remaining five think the stock is better off Hold (Hold). The average target price is $556.64 billion - that's 8.5% above the last closing price, but roughly in line with post-market quotes on July 30.

This article was AI-translated and verified by a human editor