Tech giant Microsoft surged Thursday morning to become the world’s second company to hit a $4 trillion market capitalization in intraday trading, joining chipmaker Nvidia in the milestone club.
The rise followed a strong fiscal fourth-quarter earnings report, in which the company outperformed analyst expectations with 18% revenue growth, driven largely by its cloud computing and AI businesses.
Microsoft reported $76.4 billion in revenue for the quarter, with operating income of $34.3 billion (up 23%) and net income of $27.2 billion (up 24%). Diluted earnings per share came in at $3.65, up 24%.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
CEO Satya Nadella credited the company’s growth to the adoption of AI-powered cloud solutions.
He said,
“Cloud and AI are the driving forces of business transformation across every industry and sector. We’re innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75 billion in revenue, up 34 percent, driven by growth across all workloads”.
Also speaking, Amy Hood, executive vice president and chief financial officer of Microsoft said,
“We closed out the fiscal year with a strong quarter, highlighted by Microsoft Cloud revenue reaching $46.7 billion, up 27% (up 25% in constant currency) year-over-year”.
Key Segment Highlights
- Productivity and Business Processes: $33.1B revenue, up 16%.
- Microsoft 365 Commercial revenue rose 16%, with Commercial cloud revenue up 18%.
- Microsoft 365 Consumer revenue jumped 21%, while LinkedIn revenue grew 9%.
- Dynamics products and services revenue increased 18%, led by Dynamics 365 growth of 23%.
- Intelligent Cloud: $29.9B revenue, up 26%.
- Server products and cloud services revenue grew 27%, with Azure revenue soaring 39%.
- More Personal Computing: $13.5B revenue, up 9%.
- Windows OEM and Devices revenue rose 3%.
- Xbox content and services revenue climbed 13%.
- Search and news advertising revenue (ex-TAC) increased 21%.
Microsoft’s multibillion-dollar investment in OpenAI continues to pay off, integrating cutting-edge AI into its Office Suite and Azure offerings. This AI edge has helped Azure become the company’s top revenue driver, propelling Microsoft to the forefront of the generative AI race ahead of Google Cloud and Amazon Web Services.
The tech giant first reached a $1 trillion market valuation in April 2019, driven by strong cloud computing growth, particularly from Azure, and better-than-expected earnings. The stock surged about 4% to $130.66, briefly surpassing the $1 trillion mark, making Microsoft the third company after Apple and Amazon to achieve this milestone. This was fueled by a 41% increase in cloud revenue and robust performance across its business segments, with Windows, Office, and Azure each contributing significantly.
Compared to its big tech peers, Microsoft benefits from having an unmatched level of diversification in its business, ranging from enterprise software to cloud infrastructure to Windows to consumer products, including devices and social media through LinkedIn.
More recently, in January 2024, Microsoft hit $3 trillion valuation becoming the second company after Apple to reach this milestone. The surge was driven by strong AI investments, particularly its partnership with OpenAI, and robust growth in Azure cloud services, which saw a 50% revenue increase.
With the lastest $4 trillion valuation mark, the company’s stock has risen nearly 28% year-to-date, more than doubling in value since ChatGPT’s late-2022 debut.
Despite its significant growth, Microsoft is streamlining operations. Earlier this month, it announced plans to cut around 9,000 employees (about 4% of its workforce)—its largest reduction since 2023—after previously laying off 6,000 workers in May.
Looking ahead, Microsoft plans to spend over $30 billion in capital expenditures this quarter, up from $24.2 billion last quarter, as part of its massive $80 billion.