Microsoft shares surged 15.51% on July 30, setting a new record for the largest single-day increase in market capitalization in U.S. stock market history. The rally was fueled by the company's fourth-quarter fiscal earnings report, which exceeded analyst expectations across all key metrics, paired with a robust forward outlook.
The tech giant reported quarterly revenue of $90 billion, surpassing the $87.7 billion consensus estimate and marking a significant increase from the $76.4 billion posted in the same period last year. Earnings per share came in at $4.74, also above the anticipated $4.25. Capital expenditures, including finance leases, totaled $41 billion for the quarter, slightly below the market's $42 billion forecast. This suggests stronger-than-expected cost control even as Microsoft aggressively expands its artificial intelligence infrastructure.
As the primary growth driver, Microsoft's Intelligent Cloud segment generated $39.3 billion in revenue, exceeding the $38.1 billion market expectation. Within this unit, cloud platform Azure saw its revenue growth rate accelerate to 43%, with its annualized revenue surpassing the $100 billion milestone for the first time. The company projects Azure's growth rate will further increase to 45% in the current quarter. Additionally, subscriptions for the office software AI assistant, Microsoft 365 Copilot, have surpassed 30 million seats.
In other business segments, Productivity and Business Processes revenue reached $37.8 billion, above the estimated $37.3 billion. The More Personal Computing segment, which includes Windows systems, posted revenue of $12.9 billion, exceeding the $12.1 billion forecast. The company's remaining performance obligations, a key indicator of future revenue potential, jumped to $678 billion, significantly outpacing the market's expectation of $647.6 billion.
Earlier this year, Microsoft's stock performance had lagged behind the broader market due to concerns that its massive, multi-billion-dollar investments in AI would not translate quickly into tangible returns. However, the latest strong financial data and the clear expectation of accelerating cloud computing growth have effectively dispelled investor doubts and renewed confidence in the company's ability to commercialize its AI capabilities.
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