Microsoft inches closer to becoming $4T company
What's the story
Microsoft is on the verge of becoming the world's second-ever $4 trillion company, thanks to its strong quarterly earnings. The tech giant's shares surged as much as 9% during extended trading on Wednesday, taking its market value closer to the coveted milestone. If this momentum continues through Thursday's market open, Microsoft will join NVIDIA in hitting this historic achievement.
Financial performance
Cloud business exceeds expectations
Microsoft's latest earnings report highlights its stronghold in the artificial intelligence (AI) revolution that has propelled mega-cap tech stocks and the broader market over the past few years. The company's cloud business exceeded expectations, with its popular Azure cloud-computing unit witnessing a 39% increase in sales. This was well above analysts' predictions of 34%.
Future projections
CFO Hood shares optimistic projections
On an analyst call, Microsoft's Chief Financial Officer Amy Hood revealed that the company expects its fiscal first-quarter capital expenditures to exceed $30 billion. She also projected double-digit revenue growth for the full year. Additionally, Azure is expected to achieve a 37% growth rate in Q1, surpassing forecasts and further solidifying Microsoft's position in the market.
Stock analysis
Microsoft's stock on a remarkable run
Microsoft's stock has been on a remarkable run, gaining nearly 45% since its April 8 low. This year, the company has outperformed most of its peers in the Magnificent Seven mega tech stocks. Despite some concerns over its AI position and Azure growth in early 2024 and Q1 2025, Wall Street remains largely bullish on Microsoft shares. Among 72 analysts covering the company, 65 have issued buy ratings for it.