Microsoft Surges 15% to $451 After Azure Growth Accelerates to 43%

Microsoft shares jumped 15% to $451 on July 30 after posting fiscal Q4 revenue of $90 billion, beating analyst estimates of $87.7 billion. Azure cloud revenue accelerated to 43% growth and passed the $100 billion mark for the first time. The company now has over 30 million paid seats for Microsoft 365 Copilot, up from 20 million in April, signaling that its $190 billion data center buildout is delivering returns.

Why the stock surged 15%

Microsoft posted earnings per share of $4.74 on revenue of $90 billion, both ahead of forecasts. The Intelligent Cloud segment, which includes Azure, generated $39.3 billion in revenue versus expectations of $38.1 billion. Investors had worried for months that massive AI spending would erode profits, but the earnings proved that demand for cloud services is strong enough to offset the cost.

The company added nearly $450 billion to its market cap in a single day, the largest single-day market value increase ever recorded. Microsoft’s stock popped even as the company signaled potential spending expansion in fiscal 2027, showing confidence that revenue growth will continue.

Azure and Copilot drive the rally

Azure growth accelerated to 43% in Q4, ahead of market expectations, and the company expects it to hit 45% in the current quarter. Azure revenue passed $100 billion for the first time. Microsoft 365 Copilot seats jumped to over 30 million from 20 million in April, indicating rapid adoption of the AI work assistant.

According to Forrester analyst Tracy Woo, “Microsoft’s strong revenue performance, combined with accelerating Copilot adoption, signals that its $190 billion data center buildout is beginning to deliver returns.”

Earnings beat across all divisions

Microsoft’s Business Productivity and Business Processes segment topped $37.8 billion compared to a projected $37.3 billion. More Personal Computing, which includes Windows, generated $12.9 billion versus an expected $12.1 billion. Remaining performance obligations, or contracts Microsoft must still deliver on, hit $678 billion versus an anticipated $647.6 billion.

Full year revenue reached $332 billion with operating income exceeding $155 billion. The company’s trailing 12-month net profit margin improved to 40.3% from 36.1% a year earlier, showing that profitability is expanding alongside growth.

What the data shows for investors

Meyka grades MSFT an A with a 12-month forecast of $504.19, suggesting upside from the current $451 price. The stock trades at a 25.3x trailing price-to-earnings ratio. Analyst consensus is a strong Buy, with 27 Buy ratings, 2 Holds, and 1 Sell. The RSI at 72.71 signals overbought conditions, meaning the stock may face near-term pullback pressure despite the strong fundamentals.

Final Thoughts

Microsoft’s earnings proved that cloud demand and AI adoption are real, not hype. With Meyka grading the stock an A and analysts overwhelmingly bullish, the data supports the rally, though the overbought RSI suggests caution on timing new positions.

FAQs

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.