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Microsoft shares surge following strong fiscal fourth-quarter earnings and robust AI growth

Microsoft reported a significant post-earnings rally, with shares rising over 17% since the start of trading on Thursday. The company reported $90.01 billion in revenue, an 18% year-over-year increase, and a net income of $35.77 billion. Key drivers of this growth included the Intelligent Cloud segment, where Azure revenue exceeded $100 billion for the first time, and the Microsoft 365 Copilot AI product, which surpassed 30 million paid seats. CEO Satya Nadella highlighted the earnings as a sign of progress for the company's AI efforts, noting that customers are placing confidence in the company to power their AI transformations. While the stock has been down 5% since the start of the year, the strong performance of AI-related products and efficient capital expenditure spending contributed to a market capitalization of $3.4 trillion. However, the company also announced plans to lay off 4,800 employees, primarily affecting the Xbox department, due to the shifting landscape of the tech sector wrought by AI.

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