Microsoft Surges by 25% After Strong Earnings Report and Record Azure Growth

Microsoft's stock surged by 25% in just seven sessions, reaching $487.65 on Tuesday, July 27. The dramatic repricing of the megacap company's shares has left analysts wondering whether it will hold.

The price jump was triggered by Microsoft's strong earnings report for the fourth quarter of fiscal year 2026, which showed revenue exceeding $100 billion for the full fiscal year and growing 41% across fiscal 2026. Azure revenue grew 43%, accelerating from 40% in the third quarter and surpassing Amazon Web Services.

The Intelligent Cloud segment housing Azure posted $39.31 billion in fourth-quarter revenue, up 31.6% and ahead of the $38.16 billion consensus. Microsoft Cloud revenue for the full fiscal year reached $214 billion, up 27%. The company's artificial intelligence services accounted for roughly 16 percentage points of the third-quarter growth rate.

The key to the strong performance lies in Microsoft's ability to convert capital expenditure into demand-driven spending and its contracted backlog figure of $678 billion, up 84% year over year. This represents two years of contracted work already booked and underscores the underlying strength of the business.