TMTPOST -- Microsoft Corporation on Thursday once entered into the $4 trillion club after the software giant posted blockbuster earnings for the past quarter.

Credit：Microsoft

Microsoft shares rose as much as 8.2% in the morning trade, driving its market capitalization to past $4 trillion. It thus became the second listed company in history to pass the $4 trillion market value mark following Nvidia Corporation, which previously topped the mark on July 9. Microsoft stock later Thursday pared around half of gains and settled nearly 4% higher with the market cap of about $3.97 trillion. It was still a company that is most likely to become the second firm ever to cross a $4 trillion market value threshold as of close.

The market cap milestone highlighted investors’ enthusiasm after Microsoft’s earnings report, fueled by strong cloud and artificial intelligence (AI) strength.

Microsoft posted strong results across the board for fourth fiscal quarter ended June 30, 2025. Revenue jumped 18% year-over-year (YoY) to $76.44 billion, shattering Wall Street estimated $73.89 billion. That suggested sales accelerated from a 13% YoY increase three months ago. Diluted earnings per share (EPS) for the June quarter climbed 24% to $3.65, topping analysts’ projection of #3.37, compared with the growth rate of 17.7% for the previous quarter.

Microsoft cloud business, which is currently most evidently benefiting from generative AI applications, also beat analysts’ estimates. The commercial cloud brought $46.7 billion from April to June, representing a YoY surge of 27%. Analysts anticipated the segment recorded $45.96 billion of revenue. Microsoft Intelligent Cloud, which also includes the core cloud platform Azure, saw revenue gained 21% YoY to $29.9 billion, ahead of Wall Street estimate of $29.1 billion.

Revenue from Azure and other cloud services recorded a YoY increase of 39%, whereas analysts expected the unit would deliver an increase of 34.2%, up from 33% three months ago. Microsoft CEO Satya Nadella disclosed Azure surpassed $75 billion in revenue this fiscal year, up 34% YoY. That was the first time for Microsoft to disclose Azure revenue.

Nadella attributed cloud and AI to the robust financial results. “Cloud and AI is the driving force of business transformation across every industry and sector,” Nadella said in a statement, adding that Azure revenue was driven by “growth across all workloads.” The chief executive said his company is“ innovating across the tech stack to help customers adapt and grow in this new era, and this year”, and told analysts “we are going through a generational tech shift with AI.”

Microsoft continued heavy investment in AI infrastructure. Captial expenditure, or Capex, including finance leases, hit a new quarterly record at $24.2 billion for the fourth fiscal quarter with a 27% YoY increase. That represented a more than 13.1% rise from the preceding quarter, ahead of analysts’ expectation of $23.17 billion. The Capex eased concerns over Microsoft’s scaling back AI spending as it resumed growth after the company reported a 5.3% decrease, its first quarter-over-quarter (QoQ) decline in Capex in more than two years.

Microsoft executives have indicated that the company will match increases in demand for AI services by building up its data centers. Nadella on an earnings call said Microsoft now has more than 400 data centers across 70 regions worldwide. The company anticipated more than $30 billion in Capex for the current quarter, or the first quarter of this fiscal year, said Chief Financial Officer (CFO) Amy Hood. That forecast marks a new record high for Capex with an QoQ rise of more than 24%.