Microsoft Trades Near 52-Week High as Market Sees AI Potential

Microsoft's share price has recovered from its June lows and is now trading near its 52-week high. The company closed at $513.53 on August 28 after sealing its longest winning streak of the year, a run that flipped the stock from down about 19% on the year to positive for 2026.

Wall Street's fear that AI would gut the software sector has faded, and BofA raised price targets on ten software names in the stretch, with Microsoft leading the group higher. However, the easy money was in the recovery off the June lows, and that trade is done.

Microsoft's fiscal fourth quarter earnings report gave buyers hard numbers: revenue of $90 billion, up 18%, and adjusted earnings of $4.74 that beat the Street's $4.24 by nearly 12%. Azure grew 43% in the quarter, and for the full year crossed $100 billion in revenue for the first time.

Management reported $41 billion of capital expenditures in the quarter, and free cash flow of $19.6 billion against $55.4 billion in operating cash flow, a gap that exists because Microsoft is pouring cash into data centers. Hood guided calendar 2026 capex to roughly $175 billion after a lease accounting change.