Microsoft stock surges 37.5%, best quarter in 28 years, adding $1 trillion in market value

Money & Banking··US·Read original
4▲1 ▼0Impact / 5
Summary · why it matters

Microsoft shares closed the July-September quarter up 37.5%, the biggest quarterly gain since 1998, adding $1 trillion to the company's market capitalization, according to Bloomberg. The main driver was the late-July earnings report, in which the Cloud business grew at its fastest pace in four years on strong demand for AI services, sending the stock up 16% in a single day, its best daily gain since October 2008, and adding about $450 billion to the company's market value. Among the big technology companies pouring money into AI, including Alphabet, Amazon and Meta Platforms, Microsoft is the only one whose free cash flow has not turned negative on an annualized basis. Meanwhile, of the 72 analysts tracked by Bloomberg, only 3 do not have a buy rating, and none recommend selling, with the average price target implying the stock could rise another 11% over the next 12 months. Adam Wood of Morgan Stanley estimates the stock could deliver a total return of about 20% over the coming year, and Wall Street expects revenue to rise about 18% in fiscal 2027 before accelerating to about 21% in fiscal 2029. Earnings per share are expected to rise about 11% in the current fiscal year, slowing from nearly 32% in fiscal 2026, before reaccelerating to nearly 19% in fiscal 2028 and about 21% in fiscal 2029.

Impact on assets 5

Artificial Intelligence▲ · 3 stocks
Microsoft Corporation
MSFT
▲ PositiveCapitalDemandrelevance

Microsoft's late-July earnings showed fastest cloud growth in four years on AI demand, driving a 37.5% quarterly gain and $1T market value add.

Financials▲ · 1 stocks
Morgan Stanley
MS
± MixedCapitalrelevance

Morgan Stanley's Adam Wood is cited estimating Microsoft could deliver ~20% total return, a passing analyst view not about Morgan Stanley itself.

Spatial Computing / AR/VR▲ · 1 stocks
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