Shares of Microsoft (NASDAQ: MSFT) surged 24.6% in July, dramatically outpacing a market that was essentially unchanged for the month.
The S&P 500 index edged down less than 0.1% during July, while the tech-heavy Nasdaq Composite declined 3.2%, making Microsoft’s performance all the more striking.
The rally carried additional significance given that Microsoft shares had been roughly 19% in the red for 2026 before the company’s earnings release late in the month.
Through August 4, Microsoft stock had returned 2.3% for the year, compared to a 13.8% return for the S&P 500 over the same period.
The single biggest catalyst came on July 30, when shares jumped 15.5% following the release of fourth-quarter fiscal 2026 results, which covered the period ended June 30.
In total, the stock gained 19% across the two trading days immediately following that earnings release, as investors digested the scale of the company’s beat.
Microsoft reported quarterly revenue of $90.0 billion, up 18% year over year, comfortably clearing Wall Street’s consensus estimate of $87.6 billion.
Adjusted earnings per share came in at $4.74, well above the analyst consensus of $4.24, representing a 31% improvement over the prior-year quarter, though $0.27 per share was attributable to special items including a $3.2 billion gain from the company’s investment in AI firm Anthropic.
The standout performer within the business was Azure, the company’s cloud infrastructure platform, which saw sales soar 43% and crossed a major milestone for the fiscal year.
CEO Satya Nadella said in the earnings release: “This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their AI transformation.”
Cloud demand continues to outstrip available capacity, though Microsoft is moving aggressively to close that gap across its global infrastructure footprint.
Nadella noted on the earnings call that the company added 31 new data centers across five continents during the quarter, bringing the total to 88 new data centers added in the fiscal year.
CFO Amy Hood offered an optimistic outlook for the period ahead, with the company projecting first-quarter fiscal 2027 revenue of between $89.85 billion and $90.95 billion.
That guidance represents year-over-year growth of 16% to 17%, with Hood describing the trajectory as one of “accelerating commercial growth” as enterprise AI adoption continues to expand.
