Microsoft stock recorded its strongest quarterly performance since 1998, rising 37 percent to $509 between late June and late September 2026 from about $372.
The catalyst for this surge was the company's fiscal fourth-quarter 2026 earnings report, released July 29. Microso $90.0 billion in revenue, an 18 percent increase year-over-year, which surpassed analyst expectations.
Net income reached $35.8 billion under GAAP accounting standards, a 31 percent increase. The company's adjusted per-share profit was $4.74, exceeding analyst projections of $4.24.
Azure, Microsoft's cloud computing platform, grew revenue 43 percent year-over-year. This growth rate beat the roughly 40 percent consensus estimate and represented Azure's fastest growth since early 2022.
For the first time, Azure's annual revenue surpassed $100 billion. Microsoft's broader cloud business, which includes Azure along with Office 365 commercial and Dynamics, posted revenue of $59.3 billion, up 27 percent.
Following the earnings release, shares jumped 15 percent to 16 percent on July 30. This marked the largest single-day percentage gain for the stock since 2008.
The single-day rally added about $450 billion to Microsoft's market capitalization. This represents the biggest single-day market cap addition in U.S. market history.
Microsoft's commercial backlog reached a record $678 billion. Its AI-assisted productivity suite, Microsoft 365 Copilot, surpassed 30 million paid seats.
The company maintained its annual capital expenditure guidance at $175 billion. This signals continued heavy investment in data centers and AI compute infrastructure.
For the upcoming quarter, Microsoft forecast Azure revenue growth of about 45 percent. This projection would accelerate from the 43 percent reported in the fourth quarter.
CEO Satya Nadella and CFO Amy Hood have spent nearly a decade repositioning Microsoft toward cloud services and AI tooling. The current Azure growth trajectory and Copilot adoption numbers suggest this repositioning continues to gain momentum.
Azure's 43 percent growth rate places pressure on competitors like Amazon Web Services and Google Cloud. Rivals must demonstrate they are keeping pace with enterprise demand for AI-integrated cloud services.
Sustaining the stock's $509-plus valuation depends on whether the 45 percent Azure growth forecast for the next quarter materializes. Continued growth in Copilot seat counts must also justify the $175 billion annual capital expenditure commitment.
Microsoft also announced a quarterly dividend increase Sept. 15. The stock currently trades at $508.96, about 6 percent below its 52-week high of $549.20.
