by Carmen Reinicke
Microsoft Corp. is set to become the second company in the world to reach a $4 trillion market capitalization after reporting quarterly earnings that beat Wall Street’s expectations, sending the stock soaring in premarket Thursday.
Shares of the technology behemoth jumped as much as 9.1% to $560 in premarket trading in New York, and if even a portion of the gain holds through the market open, Microsoft will reach a market value of $4 trillion. Nvidia Corp. became the first company to hit the milestone earlier this month.
“Microsoft is getting the recognition that it deserves because it is the operating system for business. All of us run our businesses on Microsoft with Word, with Outlook, with Excel,” said Kim Forrest, chief investment officer at Bokeh Capital Partners LLC. “This quarter’s results point to an even better position for Microsoft because, like Nvidia, there appear to be no substitutes.”
The company’s latest results confirmed that it’s a leader in the artificial intelligence boom that’s lifted megacap tech stocks, and the broader market, for the last few years. Microsoft reported better-than-expected growth in its cloud business, and its closely-watched Azure cloud-computing unit posted a 39% rise in sales, handily beating the 34% analysts expected.
On a call with analysts, Chief Financial Officer Amy Hood said Microsoft expects fiscal first quarter capital expenditures at more than $30 billion, and full year revenue growth in the double digits. In addition, Azure is expected to post a 37% growth rate in the first quarter, above forecasts.
The stock is the second-best performer among the so-called Magnificent Seven mega tech stocks this year. Since its April 8 trough when President Donald Trump’s sweeping tariff threats spurred a broader market selloff, the stock surged nearly 45% to close just shy of a record high ahead of its Wednesday earnings report.
This year has marked something of a rebound for Microsoft stock. It had lagged its peers in 2024 and the first quarter of 2025, the only Magnificent Seven stock in the red for that period, as investors grew concerned about its AI position and Azure growth.
Wall Street is largely bullish on Microsoft shares, with 65 of the 72 analysts covering the company giving it a buy rating and one giving it a sell, according to data compiled by Bloomberg. The average 12-month price target of $554 implies upside of about 8% from Wednesday’s close.
(Updates chart and stock moves in second paragraph)
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