Microsoft stock surged Thursday after strong cloud growth and an upbeat Azure forecast eased concerns about the company’s heavy artificial intelligence spending.
MSFT closed near $451.50, up about 15.5%, for its strongest one-day percentage gain since October 2008. The rally added nearly $450 billion to Microsoft’s market value, the largest one-day increase recorded by a company, and lifted its valuation to about $3.35 trillion.
Azure Growth Powers Microsoft Earnings
Microsoft reported fiscal fourth-quarter revenue of $90 billion, up 18% from a year earlier. Net income increased 31% to $35.8 billion, while diluted earnings per share rose 32% to $4.81.
Cloud results gave investors the clearest reason to buy the stock. Microsoft Cloud revenue climbed 27% to $59.3 billion, while Azure and other cloud services revenue increased 43%. The company’s remaining contracted commercial revenue rose 84% to $678 billion, giving Microsoft a large base of future business.
Microsoft said annual Azure revenue passed $100 billion for the first time, rising 41% during the fiscal year. Microsoft 365 Copilot also reached more than 30 million paid seats, with quarterly additions more than doubling from the previous period.
Management expects Azure revenue to grow about 45% in constant currency during the current quarter. That forecast came in well above the roughly 41% growth analysts had expected and helped show that demand for AI computing remains stronger than Microsoft’s available capacity.
Earnings Gap Changes the Chart
The first supplied chart shows Microsoft jumping from the low-$390 area to above $450 following the earnings release. The stock reached an intraday high near $458.57 before closing around $451.50.
Microsoft Earnings Gap. Source: The Kobeissi Letter (@KobeissiLetter) on X
The sharp gap reflects a major change in investor expectations. The session high near $458.50 now forms the first resistance area, with $460 acting as a nearby psychological level.
The large open space below the stock also creates risk. Earnings gaps can partly retrace after the first wave of buying, especially when traders take profits following a double-digit move.
MSFT Reclaims Its 200-Day Average
The second chart places Microsoft above its 200-day simple moving average, shown near $433.80. The 50-day and 20-day averages remain much lower, around $398.35 and $392.89, respectively.
Microsoft SMA Reclaim. Source: Master WU (@MasterPandaWu) on X
Holding above the $433 to $438 area would support the view that the earnings rally changed Microsoft’s broader trend. A drop back below the 200-day average would weaken that signal and raise the chance of a deeper gap retracement.
Investors must also weigh Microsoft’s spending plans. The company expects quarterly capital spending above $50 billion and adjusted its calendar-year estimate to about $175 billion. Windows OEM and Devices revenue fell 7% in the latest quarter, while Xbox content and services revenue dropped 10%.
For now, Microsoft’s earnings, Azure growth and AI demand support the rally. The next technical test is whether MSFT can hold above its 200-day average and challenge the $458.50 to $460 resistance zone.
