Microsoft Shares Jump 9% on Strong Earnings Beat

Microsoft shares jumped 9% to $426.03 in after hours trading after the company reported fiscal fourth quarter earnings that easily topped Wall Street estimates. Revenue hit $90 billion with earnings of $4.81 per share, beating the expected $87.62 billion and $4.24 per share. The strong report arrived just a day after Scotiabank trimmed its price target for the tech giant from $550 to $470 while keeping a bullish rating.

The positive market reaction was largely driven by massive cloud growth. Total cloud revenue reached $59.3 billion, marking a 27% increase from the previous year. Azure and other cloud services grew by 43%, pushing Azure past $100 billion in annual revenue for the first time. Analysts noted that investors are finally feeling comfortable with the heavy capital spending required to fuel artificial intelligence infrastructure.

Looking ahead, Microsoft guided first quarter fiscal 2027 revenue between $89.85 billion and $90.95 billion, with Azure growth expected near 45%. Capital spending will remain high as the company continues building out data centers. Traders will watch closely to see if cloud demand stays strong enough to keep justifying these massive expenses.