Microsoft stock set for biggest quarterly gain in 28 years

Microsoft has quietly put together one of its most remarkable quarters in nearly three decades. Shares rose approximately 37% between late June and late September 2026, moving from roughly $372 to around $509, a run that would mark the company’s strongest quarterly performance since 1998.

What actually moved the stock

The catalyst was Microsoft’s fiscal fourth-quarter 2026 earnings report, released on July 29. Revenue came in at $90.0 billion, up 18% year-over-year and ahead of what analysts had penciled in. Net income reached $35.8 billion, a 31% increase under GAAP accounting standards.

Microsoft’s cloud computing platform grew revenue 43% year-over-year, beating the roughly 40% consensus estimate and clocking its fastest growth rate since early 2022. For the first time, Azure’s annual revenue crossed $100 billion. Microsoft’s broader cloud business, which includes Azure alongside products like Office 365 commercial and Dynamics, posted revenue of $59.3 billion, up 27%.

Shares jumped roughly 15% to 16% on July 30, the largest single-day percentage gain for the stock since 2008. The move added approximately $450 billion to Microsoft’s market capitalization in a single session, the biggest single-day market cap addition in US market history.

The company’s commercial backlog hit a record $678 billion.

The AI bet is paying off

Microsoft 365 Copilot, the AI-assisted productivity suite embedded across Word, Excel, Teams, and other tools, surpassed 30 million paid seats.

Microsoft maintained its annual capital expenditure guidance at $175 billion, signaling continued heavy investment in data centers and AI compute. For the upcoming quarter, the company forecast Azure revenue growth of approximately 45%, which would accelerate from the 43% reported in Q4.

Context and what comes next

CEO Satya Nadella and CFO Amy Hood have spent the better part of a decade repositioning Microsoft around cloud services and, more recently, around AI tooling. The Azure growth trajectory and Copilot adoption numbers suggest that repositioning is compounding rather than plateauing.

Azure’s 43% growth rate puts pressure on Amazon Web Services and Google Cloud to demonstrate they are keeping pace with enterprise demand for AI-integrated cloud services.

Whether the stock can sustain a $509-plus valuation will depend on whether Azure’s 45% growth forecast for the next quarter actually materializes, and whether Copilot seat counts continue climbing at a pace that justifies the $175 billion annual capex commitment.