Microsoft Shatters Records: Stock Soars Past $4 Trillion Mark in Historic Rally

Redmond's tech titan just rewrote Wall Street's rulebook—again.

Microsoft shares blasted past all previous ceilings today, becoming the first publicly traded company to crack the $4 trillion valuation barrier. The surge caps off a decade-long cloud-computing dominance streak that left analysts scrambling to update their price targets.

Why the Street can't quit MSFT:

Enterprise AI adoption is fueling Azure's growth engine while legacy Office products keep printing cash. Meanwhile, Satya Nadella's strategic bets on gaming (Activision) and AI (OpenAI partnership) are paying off like a Vegas slot machine.

Wall Street's latest love affair comes with razor-thin margins—the stock's P/E ratio now makes Tesla look like a value play. But when the music's playing, nobody wants to be the first fund manager to stop dancing.

Image source: Getty Images.

The AI boom continues

Overall revenue in the quarter was up 18% to $76.4 billion, which topped expectations at $73.8 billion.

Growth was well balanced. Revenue from productivity and business process, which includes the Microsoft 365 Office suite, was up 16% to $33.1 billion. Intelligent cloud, which includes Azure, posted 26% revenue growth to $29.9 billion, and more personal computing, which includes Windows, rose 9% to $13.5 billion.

In addition to strong growth in enterprise software and AI-focused products, Microsoft's consumer-focused franchises also did well with Xbox revenue up 13% and LinkedIn revenue up 9%. Search and news advertising revenue grew 20%, outperforming Google, though Microsoft's search business is much smaller.

Microsoft's margins continued to scale up with operating income growing 23% to $34.3 billion, and earnings per share up 24% to $3.65, ahead of the consensus at $3.38.

CEO Satya Nadella said, "Cloud and AI is the driving force 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%, driven by growth across all workloads."

Can anything stop Microsoft?

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.

That's given Microsoft an edge in leveraging its investments in AI as it can deploy the technology across a broad range of products.

The company says it expects revenue to grow double digits in fiscal 2026, and it sees strong growth continuing in its cloud business.

Microsoft stock trades at a premium, but the recent results show why. The company remains in the driver's seat as the AI era advances and looks poised for further gains.