Microsoft poised to join $4 trillion club as stock rises 8% in after-hours trading.

Microsoft poised to join $4 trillion club as stock rises 8% in after-hours trading.

Microsoft Corporation (MSFT) shares surged in extended trading on Wednesday, pushing the company's market capitalization past $4 trillion. The software giant reported better-than-expected quarterly results, with its Azure cloud-computing business driving significant revenue growth [2].

Microsoft's stock price climbed 8% in after-hours trading, lifting the company's market cap to approximately $4.1 trillion. This marks a significant milestone, as Microsoft is now on track to join Nvidia, which became the first company to reach the $4 trillion mark earlier this month [2]. Microsoft's shares have been up more than 20% year-to-date, outpacing the S&P 500's 8% gain [2].

The company's fiscal 2025 fourth quarter revenue increased 18% year-over-year to $76.4 billion, surpassing Wall Street's consensus estimate of $73.8 billion [3]. Earnings per share (EPS) increased 24% from last year to $3.65, ahead of EPS estimates of $3.37 [3]. The strong performance was driven by Azure's revenue, which exceeded $75 billion for the fiscal year 2025, marking a 34% year-over-year increase [3].

Microsoft's capital expenditures are projected to be higher than anticipated, supporting the broader AI infrastructure thesis. The company's year-to-date stock performance has been nearly straight up since its last earnings release in April, and it closed Wednesday's session essentially at an all-time high [3].

The company's Azure cloud-computing business continues to be a key driver of growth, with revenue accelerating for the second quarter in a row and materially exceeding Wall Street's consensus forecast [3]. Microsoft's revenue guidance for the three months ending in September— the first quarter of fiscal 2026 — was also better than expected [3].

Microsoft's strong performance is a positive sign for the broader tech industry, as it indicates that investments in artificial intelligence (AI) and cloud computing are paying off [1]. The company's exclusive access to OpenAI's technology has helped attract scores of businesses to its cloud service and allowed it to swiftly roll out AI products such as its M365 Copilot AI assistant for enterprises [1].

However, investor doubts have risen about the OpenAI tie-up as the companies renegotiate the deal and the start-up shifts some workloads to rivals, including Google and Oracle [1]. Microsoft has tried to reduce its reliance on OpenAI by developing in-house AI technology and broadening its model lineup with partners such as xAI, Meta, and France's Mistral [1].

Microsoft's stock performance has been impressive, with the company's shares up more than 8% in extended trading on Wednesday. The stock's rally comes after a better-than-expected earnings report and an upbeat forecast for the current period [3]. Microsoft's year-to-date stock performance has been nearly straight up since its last earnings release in April, and it closed Wednesday's session essentially at an all-time high [3].

Microsoft's strong performance is a positive sign for the broader tech industry, as it indicates that investments in artificial intelligence (AI) and cloud computing are paying off [1]. The company's exclusive access to OpenAI's technology has helped attract scores of businesses to its cloud service and allowed it to swiftly roll out AI products such as its M365 Copilot AI assistant for enterprises [1].

However, investor doubts have risen about the OpenAI tie-up as the companies renegotiate the deal and the start-up shifts some workloads to rivals, including Google and Oracle [1]. Microsoft has tried to reduce its reliance on OpenAI by developing in-house AI technology and broadening its model lineup with partners such as xAI, Meta, and France's Mistral [1].

Microsoft's stock performance has been impressive, with the company's shares up more than 8% in extended trading on Wednesday. The stock's rally comes after a better-than-expected earnings report and an upbeat forecast for the current period [3]. Microsoft's year-to-date stock performance has been nearly straight up since its last earnings release in April, and it closed Wednesday's session essentially at an all-time high [3].

References:
[1] https://www.straitstimes.com/business/companies-markets/microsoft-and-meta-fuel-648-billion-gain-in-ai-stocks-as-investments-pay-off
[2] https://www.cnbc.com/2025/07/30/microsoft-market-cap-tops-4-trillion-after-hours-on-earnings-beat.html
[3] https://www.cnbc.com/2025/07/30/microsofts-monster-quarter-and-strong-outlook-cements-its-status-as-an-ai-leader.html