Quick overview

---

Microsoft (MSFT) released an impressive fiscal fourth-quarter report for 2025 that significantly surpassed Wall Street’s expectations, resulting in a more than 7% increase in shares during after-hours trading. The strong growth of Azure and the adoption of enterprise solutions outweighed concerns about rising capital expenditures, further solidifying Microsoft’s position as the leader in the hyperscale cloud market during the AI era.

Investors had anticipated considerable expenses related to AI infrastructure, but management’s performance in the productivity and cloud segments mitigated those concerns, at least for now.

Investors were primarily worried about whether Azure could maintain growth between 30% and 40%, how the company would present its $80 billion capital expenditure outlook for fiscal 2025, and whether its partnership with OpenAI would continue to provide a competitive advantage against the increasing pressure from Google Cloud. According to data released on Wednesday, Microsoft not only met but exceeded even the highest projections, particularly in Azure, which experienced a 39% increase in constant currency, compared to consensus estimates of around 34%.

Microsoft joins Nvidia, a chipmaker that recently became the first company to reach a market capitalization of $4 trillion

The Azure cloud computing division was a key driver behind Microsoft’s 18% revenue growth, marking its fastest expansion rate in over three years. For the first time, Microsoft disclosed Azure revenue in U.S. dollars, reporting sales of Azure and other cloud services exceeding $75 billion in fiscal 2025, a 34% increase from the previous year.

Microsoft’s stock had risen 22% for the year, outpacing the S&P 500’s 8% gain. On July 25, Microsoft closed at a record price of $513.71, and in after-hours trading, it was valued at over $553.

Nvidia and Microsoft have now surpassed Apple in terms of market capitalization. Investor concerns about Apple’s ability to compete in AI have caused the iPhone manufacturer’s stock to drop 17% this year, placing it in third position at about $3.2 trillion. Apple is set to release its quarterly results following the bell on Thursday.