Microsoft value rises after Azure growth forecast beats estimates
Microsoft expects faster Azure growth as its large AI investments begin to deliver returns, easing concern over spending on data centres.
- Microsoft projected its Azure cloud platform will grow by 45% in the next quarter, exceeding analyst estimates of 40.92%.
- The positive forecast led to a record-breaking single-day market value increase of nearly $450 billion, as the company's share price rose by over 15%.
- The strong results are seen as evidence that Microsoft's significant investments in artificial intelligence are beginning to produce tangible business gains.
Microsoft’s latest results provided further evidence that its investment in artificial intelligence was beginning to produce business gains, while the company projected faster growth for Azure in the opening quarter of its 2027 financial year.
Azure is expected to grow by 45% when exchange-rate movements are excluded, exceeding the 40.92% estimate compiled by Visible Alpha.
Microsoft also indicated that it would continue generating cash during the new financial year.
The company has left its investment plans unchanged.
It expects to spend US$50 billion in the first quarter of its 2027 financial year and US$175 billion during the 2026 calendar year.
The figures helped ease concerns that Microsoft’s spending on data centres and computing infrastructure could rise more quickly than demand.
They also indicated that the company was beginning to gain tangible benefits from its large AI investments.
The announcement drove the biggest one-day increase in value ever recorded by a company on Thursday (July 30).
Microsoft added nearly US$450 billion, bringing its total value to US$3.35 trillion after its share price rose by more than 15%.
The increase exceeded Nvidia’s previous one-day record of US$441 billion, set on April 9, 2025, according to LSEG data.
“Microsoft reported a very strong quarter, and it struck the tone markets are looking to hear as the key drivers of growth came from the cloud and AI divisions,” said Brian Mulberry, chief market strategist at Zacks Investment Management.
Before Thursday’s increase, Microsoft had fallen behind some other major US technology companies during the year.
Its share price was down by more than 18% through Wednesday’s close.
At least nine financial firms subsequently increased their estimates of what one Microsoft share could be worth, bringing the average estimate to US$560.90.
“The key question was whether it could shift the conversation from how much it is spending on AI to what it is earning from those investments, and the results suggested meaningful progress,” noted Jake Behan, head of capital markets at Direxion.
Souce: Reuters
