Microsoft Stock Soars 26% Since Earnings Report
Microsoft's stock has been on a tear since its earnings report on July 29, rising by an impressive 26% in just a few days. The company reported strong growth in its cloud computing business, with revenue increasing 43% year over year, and its AI tool Microsoft Copilot reached over 30 million paid seats in the quarter.
The market was worried that Microsoft's hyperscaler competitors, such as Amazon and Alphabet, would increase their spending on data centers, but Microsoft left its capital expenditure guidance unchanged. This news likely helped bolster the company's share price, as investors were concerned about overspending on data center build-outs.
Microsoft's stock was also trading at a relatively low valuation before the earnings report, with a forward price-to-earnings ratio of less than 20 times. However, it is now trading at a more reasonable level, although still on the lower end compared to some of its big tech peers.