Microsoft added nearly $450 billion in market value on Thursday, the largest one-day gain on record for a company, after it forecast stronger-than-expected cloud growth and signaled continued cash generation through its new fiscal year.
The software giant's shares closed up more than 15%, lifting its market capitalization to $3.35 trillion, surpassing chip giant Nvidia's previous record one-day gain of $441 billion on April 9, 2025, according to LSEG data.
"Microsoft reported a very strong quarter and it struck the tone markets are looking to hear as the key drivers of growth came from the cloud and AI divisions," said Brian Mulberry, chief market strategist at Zacks Investment Management.
The results offered fresh evidence that Microsoft's massive AI investments are beginning to pay off, helping ease investor concerns that heavy spending on data centers and computing infrastructure could outpace demand.
Microsoft has lagged some of its "Magnificent Seven" peers this year, with its stock down more than 18% up to Wednesday's close.
At least nine brokerages raised the target price on the stock, with the mean target now $560.90.
Microsoft said its spending plans remain unchanged and that it expects capital expenditures of $50 billion for the fiscal first quarter of 2027 and $175 billion for the 2026 calendar year.
In its first quarter, Microsoft expects Azure to grow 45% on a constant-currency basis, well above analysts' estimate of a 40.92% increase, according to Visible Alpha data.
"The key question was whether it could shift the conversation from how much it is spending on AI to what it is earning from those investments, and the results suggested meaningful progress," Direxion's head of capital markets, Jake Behan, said.
The software giant's shares closed up more than 15%, lifting its market capitalization to $3.35 trillion, surpassing chip giant Nvidia's previous record one-day gain of $441 billion on April 9, 2025, according to LSEG data.
"Microsoft reported a very strong quarter and it struck the tone markets are looking to hear as the key drivers of growth came from the cloud and AI divisions," said Brian Mulberry, chief market strategist at Zacks Investment Management.
The results offered fresh evidence that Microsoft's massive AI investments are beginning to pay off, helping ease investor concerns that heavy spending on data centers and computing infrastructure could outpace demand.
Microsoft has lagged some of its "Magnificent Seven" peers this year, with its stock down more than 18% up to Wednesday's close.
At least nine brokerages raised the target price on the stock, with the mean target now $560.90.
Microsoft said its spending plans remain unchanged and that it expects capital expenditures of $50 billion for the fiscal first quarter of 2027 and $175 billion for the 2026 calendar year.
In its first quarter, Microsoft expects Azure to grow 45% on a constant-currency basis, well above analysts' estimate of a 40.92% increase, according to Visible Alpha data.
"The key question was whether it could shift the conversation from how much it is spending on AI to what it is earning from those investments, and the results suggested meaningful progress," Direxion's head of capital markets, Jake Behan, said.
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