Why Is Microsoft (MSFT) Stock Up Today? Azure Grows 43%, EPS Hits $4.81

Quick Answer: Microsoft’s (NASDAQ: MSFT) stock leapt by 14% after the company’s fiscal Q4 2026 earnings reported exceeded investor and analysts expectations. Microsoft’s total revenue grew by 18% year-over-year to just under $90 billion. Revenue from Azure grew year-over-year by 43%, and the diluted earnings per share (EPS) of $4.81. These results comfort investors and show that Microsoft’s investment into Artificial Intelligence (AI) was smart and growing the Cloud business profitability.

Introduction

Microsoft stock performed well on Thursday after the Cloud earnings grew and investors became less concerned regarding the aggressive business spending on AI. Microsoft’s revenue from Azure gained 43% year-over-year, and quarterly earnings grew to $90 billion with earnings surpassing analysts expectations. The market reacted positively to the management’s optimistic outlook, moving Microsoft’s stock to a historical high, and positively affecting most of the AI and semiconductor stocks.

Azure Growth Reassures Investors on AI Spending

The most important point from Microsoft’s quarterly earnings was not merely surpassing earnings expectations, but proof of the massive years long investment into AI beginning to pay off. Azure and the rest of Microsoft’s Cloud Services grew by 43% year-over-year, and exceeded analysts expectations while Microsoft Cloud reached $59.3 billion.

Management guided to the future quarter’s earnings exceeding expectations while the growth in capital expenditures would remain under control with the continued investment on the AI side of the infrastructure. This positively impacted the investors concerns that AI investments would negatively impact profits, and this was a concern over most of the Tech stocks over the last quarter.

AI Demand Continues to Drive Microsoft’s Fundamentals

Microsoft’s quarterly earnings of $90 billion represented an 18% year-over-year growth while the GAAP earnings increased to $35.8 billion or $4.81 per diluted share. The Intelligent Cloud segment continued to do well, bringing in $39.3 billion in revenue as Azure became the first cloud service to generate $100 billion in revenue in a year. Microsoft noted that the Commercial Remaining Performance Obligation also grew to $678 billion, reflecting strong customer adoption of Azure along with Microsoft 365 and Copilot services.

Microsoft 365 Copilot has now more than 30 million paid users, indicating that enterprise customers are rapidly adopting generative AI services. These numbers strengthen Microsoft’s standing as one of the main winners from enterprise AI spend.

Microsoft Technical Analysis: Earnings Gap Confirms Long-Term Breakout

Microsoft has carried out one of its best earnings breakouts in several years, moving up from the prior rising channel, as investors showed support for the company’s rapidly expanding cloud business. The earnings gap has moved MSFT well past both the 50-day EMA at $397.80 and the 100-day EMA at $394.35, establishing a new segment in the long-term uptrend. The prior resistance level at $424.80 is now the first major support level.

The strength of the earnings release is shown through the RSI being over 80 due to the aggressive institutional buying. This places the stock in the overbought level, however, the buying is more aggressive than normal. The first level of resistance is at $472.30 with further resistance at $487.40 and $498.90.

The first level of support is at $424.80 with further support at $405.70 and $388.20.

Trade Setup

Entry: Above $455.00
Targets: $472.30, $487.40
Stop Loss: Below $424.80

Microsoft maintaining price levels above $424.80, the post-earnings breakout support, keeps the general bullish trend intact. Any pullback from those levels will likely be seen as profit-taking. However, bearish pressure below that support will alter that view.

Frequently Asked Questions

Why is Microsoft stock up today?

The stock jumped after they posted better than expected fiscal Q4 numbers. Azure revenue grew 43%, quarterly revenue hit $90 billion, and management provided a positive outlook that eased investor concerns regarding the return on AI spends.

Why is Azure growth important?

Azure is the fastest growing and largest revenue segment for Microsoft. The quarterly revenue growth of 43%, reflects the continued strong demand for Microsoft cloud and AI services, which will drive revenue and profitability for Microsoft in the long run.

What are the key Microsoft price levels to watch?

The key price levels to watch are the resistances at $472.30, followed by $487.40 and $498.90. The support levels are at $424.80, $405.70 and $388.20.

ABOUT THE AUTHOR See More

Arslan Ali Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Ali Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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