Microsoft Surpasses $4 Trillion Market Cap After Strong Earnings

Microsoft’s (MSFT) market capitalization has topped $4 trillion U.S. after the technology giant posted strong second-quarter financial results. The Seattle-based company reported Q2 earnings per share (EPS) of $3.65 U.S., which surpassed the $3.37 U.S. forecast on Wall Street. Revenue of $76.44 billion U.S. was ahead of the $73.81 billion U.S. expected among analysts. Sales were up 18% from a year earlier, the fastest growth in more than three years. Importantly, Microsoft reported revenue from its Azure cloud computing unit that exceeded $75 billion U.S., which was up 34% from the prior year and ahead of consensus forecasts. The solid financial results sent Microsoft’s stock up 8% and pushed its market capitalization past the $4 trillion U.S. mark. Microsoft is only the second company to ever achieve a $4 trillion U.S. market cap along with chipmaker Nvidia (NVDA), which reached the milestone earlier in July of this year. In terms of guidance, management at Microsoft said they expect $74.7 billion U.S. to $75.8 billion U.S. in revenue for the current third quarter. The middle of that revenue range, $75.25 billion U.S., surpassed the $74.09 billion U.S. consensus forecast on Wall Street. The company also anticipates 37% Azure growth in the current quarter, which is ahead of the 33.7% expected among analysts. In terms of artificial intelligence (A.I.), Microsoft said that its Copilot products now have 100 million monthly active users. The company’s More Personal Computing unit, which includes Windows, search advertising, and Xbox video games, had revenue of $13.45 billion U.S., up 9% from a year ago. Management noted that they spent $24.2 billion U.S. in capital expenditures and assets acquired through finance leases during the most recent quarter, up 27% from a year earlier. Prior to today (July 31), MSFT stock had risen 23% this year to trade at $513.24 U.S., near an all-time high on a split-adjusted basis.