Microsoft reaches $4 trillion valuation following AI-focused earnings report

Tech company becomes second firm to achieve milestone after Nvidia, with shares rising 4.5% on cloud performance and AI infrastructure spending announcement

Microsoft reached a $4 trillion market capitalization on Thursday, joining Nvidia after delivering quarterly earnings that highlighted the company's artificial intelligence performance. The Redmond-based technology corporation saw its stock price increase 4.5% during trading, reaching an intraday valuation of $4.01 trillion.

The achievement follows Nvidia's entry into the $4 trillion club in July, making Microsoft the second firm to reach this valuation level. Since the beginning of 2025, Microsoft's shares have gained approximately 28%.

The stock movement came after Microsoft reported performance in its Azure cloud computing division and announced plans for $30 billion in capital expenditure during the current fiscal quarter. This investment focuses on expanding artificial intelligence capabilities and infrastructure.

Financial analysts noted the impact of Microsoft's Copilot AI assistant on the company's enterprise software revenues, particularly within the Microsoft 365 suite. The integration of AI features has driven adoption across business customers, contributing to growth in the productivity software segment.

Microsoft's partnership with OpenAI has enabled the company to integrate generative AI capabilities across its product portfolio. This alliance has particularly affected the Azure cloud platform, which serves as the company's primary revenue generator and positioned it against competitors like Google Cloud and Amazon Web Services.

The valuation represents Microsoft's progression from crossing the $1 trillion threshold in April 2019 to reaching $3 trillion 18 months ago. The company has reported consecutive revenue increases since September 2022.

Microsoft has been adjusting its workforce structure in recent months. The company announced approximately 9,000 job cuts in July, representing roughly 4% of its total workforce and marking the largest reduction since 2023. These layoffs followed an earlier round of 6,000 position eliminations in May.

Company representatives attributed the workforce adjustments partly to productivity changes enabled by new technologies. CEO Satya Nadella disclosed that AI systems now generate 20% to 30% of Microsoft's code.

The stock has recovered nearly 50% from its April 2025 lows, when global markets experienced volatility related to trade policy uncertainties. Microsoft's financial results indicate the company has navigated these challenges while continuing investment in AI infrastructure and cloud operations.