Microsoft is trading near $495 after gaining almost 25% in three sessions, its strongest three-day advance since October 2000. The move has erased the stock’s year-to-date losses and reflects a broad reassessment of Microsoft’s ability to convert AI investment into revenue.
Unlike the speculative rallies seen in earlier stages of the AI cycle, the current advance is supported by accelerating cloud growth, expanding commercial commitments and stronger Copilot adoption.
Azure exceeds elevated expectations
Fiscal fourth-quarter revenue increased 18% year over year to $90 billion, while adjusted earnings rose 30% to $4.74 per share. Microsoft Cloud revenue reached $59.3 billion, up 27%, and Azure growth accelerated to 43%, exceeding market expectations of approximately 40%. Azure also surpassed $100 billion in annual revenue for the first time. Microsoft 365 Copilot now has more than 30 million paid users, providing clearer evidence that enterprise AI demand is moving beyond testing and into commercial deployment. Microsoft fiscal Q4 results
Backlog supports continued investment
Commercial remaining performance obligations increased 84% to approximately $678 billion, strengthening visibility into future cloud revenue. Microsoft invested around $41 billion in capital expenditure during the quarter as it expanded data-center and AI capacity. Demand still exceeds available infrastructure in several regions, which supports continued spending but also creates execution and margin risks. Investors will now focus on whether Azure can maintain growth above 40% as the comparison base becomes more demanding.
Macro conditions reinforce risk appetite
US equities are advancing as strong corporate earnings and July’s ISM manufacturing reading of 55.6 improve confidence in economic growth. Falling oil prices on hopes of a US-Iran agreement have eased immediate inflation concerns, pushing the 10-year Treasury yield toward 4.64%. However, renewed attacks near the Strait of Hormuz could reverse this move and revive pressure on long-duration technology valuations. The Federal Reserve’s decision to keep rates at 3.50–3.75% also means that Microsoft remains sensitive to any renewed rise in yields.
$500 becomes decisive resistance
The hourly chart shows an exceptionally steep breakout from the $390–400 region, leaving Microsoft extended above all major moving averages. Momentum supports a test of the psychological $500 level, followed by $510–520 if buyers maintain control. However, the scale of the rally raises the probability of profit-taking. Initial support is located at $485–480, with a deeper pullback potentially targeting $470–465. Holding above that area, as I noted in Microsoft surges as Azure momentum and stronger guidance revive AI optimism, would preserve the bullish structure, while a return below $450 would suggest that the post-earnings move has entered a broader correction.
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