When AI lifts inventory, Microsoft ratings exceed $4 trillion

Microsoft’s stock was spiked on Thursday following quarterly results, bringing the tech giant, along with another artificial intelligence standout, to a previously unprecedented $4 trillion club.

The landmark valuation is the latest indication of a bolstered strengthening about the AI investment boom that companies like Microsoft believe are still in the early stages of market watchers as they plan over $100 billion in annual capital expenditures to add new capacity.

Microsoft reported a profit of $27.2 billion in fourth quarter revenue of $76.4 billion, imposing an additional year of growth amid a strong customer interest in the company’s cutting-edge AI capacity.

Just after noon, Microsoft’s stock rose 4.3%, giving it a market capitalization of less than $4 trillion after overturning its previous benchmark.

“Cloud and AI are the driving force behind business transformation across all industries and sectors,” said Satya Nadella, CEO of Microsoft. “We are innovating throughout Tech Stack to help our customers adapt and grow in this new era.”

The result attracted praise from Wall Street analysts during a revenue conference call that Nadella boasted that he opened new data centers on six continents last year and promoted major contracts for global companies such as Nestle and Barclays.

Microsoft was one of the first tech giants to double down on artificial intelligence when the 2022 launch of ChatGPT shook the tech industry. Microsoft has formed a strategic partnership with ChatGpt Maker Openai since 2019 and has retained intellectual property rights.

At the heart of the results was a surprising 39% surge in Azure, the company’s legacy cloud computing platform, said Angelo Zino, technology analyst at CFRA Research.

Zino is attributed to “almost everything” and a surge in Microsoft’s AI rating.

Legacy Business

While Nvidia is part of a wave of high-tech companies that have risen to prominence in the AI boom of the past few years, Microsoft has long been one of the American corporate elites and joined the prestigious Dowin Index, which has been more than a decade since introducing the once-innovated Windows program in 1999.

The company’s revenue base includes workplace mainstays such as the Outlook email platform and LinkedIn carrier website. Microsoft also has an important gaming division for the Xbox console.

All of these businesses are set up to benefit from the benefits of Microsoft’s AI.

“We see (Microsoft) as something like Enterprise King,” Zino said. “What AI does is to provide this company with new growth opportunities.”

For all of 2025, Microsoft reported revenue of $281.7 billion, up 15% from the previous year. Microsoft’s revenue has more than doubled since 2018, when it was $1100.4 billion.

Zino believes Microsoft is aiming to run on par for the next six to seven years when AI usage is now seeing 10% annual revenue growth.

This outlook, and in general, the biggest risk to the AI boom, will be “if AI supply reaches a point beyond demand,” Zino said. “It could put pressure on cloud computing and space pricing.”

©2025 AFP