Microsoft tops $4 trillion as AI fuels soaring shares

Microsoft Enters the $4 Trillion Club, Joining Nvidia in the AI Era

On Thursday, shares of Microsoft surged after the company released a quarterly report that highlighted record AI adoption and cloud expansion. The earnings climb lifted the tech giant’s market capitalization to just under $4 trillion, placing it alongside Nvidia in an unprecedented valuation milestone.

Financial Highlights of the Fiscal Q4

• Revenue: $76.4 billion
• Net profit: $27.2 billion
• Azure growth: 39 % surge, fuelled by AI integration
• Share price jump: 4.3 % rise after midday trading

CEO, Satya Nadella, Emphasizes AI and Cloud as Business Transformers

“Cloud and AI is the driving force of business transformation across every industry and sector,” Nadella said. “We’re innovating across the tech stack to help customers adapt and grow in this new era.”

Strategic AI Initiative and Global Contracts

• OpenAI partnership: Microsoft holds rights to OpenAI’s intellectual property, having partnered since 2019.
• Data center expansion: New data centers opened across six continents last year.
• Key client wins: Contracts secured with global leaders such as Nestle and Barclays.
• Gaming division: Xbox console contributes to the diversified revenue mix, also benefiting from AI features.

Legacy Business Segments Benefiting from AI

Microsoft’s long‑standing workplace products—Outlook, LinkedIn, and the gaming sector—are set to gain from the company’s AI advancements. Analyst Angelo Zino described Microsoft as an “enterprise king” that is unlocking new growth opportunities through AI.

Revenue Outlook for Fiscal 2025

• Fiscal 2025 revenue: $281.7 billion, up 15 % YoY.
• Historical revenue growth: Multiplied from $110.4 billion in 2018 to today’s level.
• Projected growth: 10 % annual revenue growth over the next 6–7 years, as AI adoption drives further opportunities.
• Risk factor: Supply-demand imbalance in AI could pressure cloud pricing and capacity if demand overshoots supply.

AI‑Driven Valuation Surge Explained

Angle Zino attributed Microsoft’s valuation surge largely to AI. The AI boom is considered early, yet companies like Microsoft plan capital expenditures of $100 billion or more annually to add new capacity.

Bottom Line

With record quarterly results and strategic AI integration, Microsoft has cemented its position in the $4 trillion club, signaling the early yet explosive growth of the AI investment landscape.