Microsoft Stocks Soar on Earnings Report Amid Cash Flow Concerns

Microsoft's stock price surged 29% over eight sessions following its July 29 earnings report, reaching $494.12 on Wednesday.

The company's quarterly revenue jumped 18% to $90 billion, with Azure growth hitting 43%, and commercial remaining performance obligations increasing by 84% to $678 billion.

However, the growth came at a cost: free cash flow sank 23% to $19.6 billion due to AI infrastructure spending exploding.

Microsoft's backlog equals roughly 7.5 quarters of current revenue, but this does not directly translate to immediate cash flow as the company must invest in infrastructure to meet demand.