MSFT Surges on Strong Cloud Demand and AI Adoption Signals

Microsoft shares surged nearly 3% on Friday as investors remained optimistic about the company's strong cloud demand and AI adoption signals. The stock beat earnings expectations for the 14th consecutive quarter, with quarterly revenue reaching $90.01 billion, a 18% increase.

The Intelligent Cloud segment saw a significant boost, with revenue growing 27% to $59.3 billion. Azure and other cloud services revenue rose an impressive 43%, contributing to the company's momentum in the AI/cloud space.

BNP Paribas analyst Stefan Slowinski noted that Microsoft strengthened its position as a leading AI beneficiary after fiscal fourth-quarter results showed progress across various products, including Azure, Microsoft 365 Copilot, GitHub Copilot, and AI infrastructure.

Slowinski highlighted several potential upside drivers for the company, including broader use of usage-based pricing in Microsoft 365 Copilot, more E7 attach opportunities, higher GPU rental pricing, and stronger OpenAI momentum. The analyst also raised his fiscal 2027 constant-currency Azure estimate to around 44%, up from roughly 41% previously.