Microsoft Corp. (MSFT) shares jumped about 9% in Thursday's premarket session after the software giant reported fiscal fourth-quarter results that comfortably beat Wall Street expectations. The catalyst? Accelerating growth in its Azure cloud business and rising adoption of AI-powered tools.
Microsoft reported fourth-quarter revenue of $90.01 billion, up 18% year over year, and earnings of $4.74 per share. Analysts had been expecting $87.62 billion in revenue and $4.24 in earnings per share — so Microsoft cleared both bars by a comfortable margin.
The star of the show was Azure. Intelligent Cloud revenue climbed 32% to $39.3 billion, while Azure and other cloud services revenue jumped 43%. Total cloud revenue — which includes Azure, Office 365, and other services — increased 27% to $59.3 billion. Those are big numbers, and they're getting bigger.
Jefferies analyst Brent Thill and CNBC's Jim Cramer both said Microsoft's results reinforce its position as one of the clearest beneficiaries of artificial intelligence. The company has multiple established revenue streams and continued cloud momentum, which gives investors confidence that its AI spending is translating into real growth.
Microsoft Offers Clearer AI Monetization
Thill told CNBC on Thursday that Microsoft and Alphabet Inc. (GOOGL) appear better positioned than Meta Platforms Inc. (META) because they already have multiple businesses generating meaningful returns from AI investments. Meta, by contrast, is still largely in the spending phase.
He noted that investors remain focused on how long Big Tech can sustain elevated AI spending and when those investments will deliver broader financial returns. Microsoft's diversified revenue base — spanning cloud, productivity software, gaming, and LinkedIn — gives investors greater confidence that its AI spending is translating into tangible growth, not just a giant experiment.
Cramer Highlights Azure, Software Strength
Cramer called Microsoft's quarter a clean beat on both revenue and earnings, saying the results could help reignite investor interest in software stocks despite recent pressure from rising bond yields. When bond yields rise, growth stocks tend to get punished because future cash flows are worth less in today's dollars. But a beat like this can change the narrative.
He pointed to Azure's 33% constant-currency growth — the platform's fastest expansion in four years — and noted Microsoft's strong free cash flow generation. That's important because it suggests the company's heavy data-center investments remain financially manageable, even as it spends billions on AI infrastructure.
Copilot Adoption Accelerates
Cramer also highlighted growing demand for Microsoft 365 Copilot, which reached 30 million paid seats, up from more than 20 million three months earlier. That's a 50% increase in just one quarter, and it shows that businesses are actually paying for AI features, not just kicking the tires.
He said the quarter reinforced confidence in Microsoft's execution and management team, adding that strong earnings from high-quality technology companies can quickly improve investor sentiment after periods of market weakness.
The stock carries a Buy rating with an average price forecast of $544.28. Recent analyst moves include:
- Cantor Fitzgerald: Overweight (Raises forecast to $522.00) (July 30)
- Barclays: Overweight (Lowers forecast to $512.00) (July 30)
- Piper Sandler: Overweight (Raises forecast to $550.00) (July 30)
Top ETF Exposure
Microsoft is a heavyweight in several major ETFs, which means fund flows can move the stock. Here are the top ones:
- Technology Select Sector SPDR Fund (XLK): 9.24% weighting
- Vanguard S&P 500 Growth ETF (VOOG): 9.47% weighting
- T. Rowe Price Growth Stock ETF (TGRW): 9.37% weighting
Why It Matters: Microsoft is among the largest holdings in these ETFs, meaning significant fund inflows or outflows can trigger automatic buying or selling of the stock. So if investors pile into tech ETFs, Microsoft gets a boost — and vice versa.
Price Action
MSFT Price Action: Microsoft shares were up 9.24% at $426.61 during premarket trading on Thursday, according to market data.
