- MSFT
- ^GSPC
Microsoft (MSFT) stock is back in favor with Wall Street.
The AlphaSpace analysis:Shares of Microsoft are now trading above their key 200-day moving average by the widest margin since October The stock is still lagging the S&P 500 (^GSPC) year to date, notching a 4.7% gain compared to a 13% rise for the benchmark index
Microsoft’s stock has relatively underperformed for the bulk of 2026 amid concerns of overspending on AI. However, the narrative has begun to shift.
What else you need to know:Microsoft’s fiscal fourth quarter earnings recently shut up the bears, which largely explains why the stock has fallen back into the good graces of Wall Street.
The tech titan posted a staggering $90 billion in revenue in Q4, up 18% year over year.
Azure and other cloud services growth surged 43%. To put that in perspective, Azure officially crossed the noteworthy $100 billion annual revenue milestone, proving that enterprise clients aren’t just experimenting with AI; they are deploying it at scale. In other words, Microsoft is monetizing its AI.
“Revenue visibility is strong, suggesting upside to estimates,” Bank of America analyst Tal Liani wrote in a note.
The company also demonstrated operating leverage, increasing operating income by 18% to $40.6 billion while significantly building out its data center capacity. CFO Amy Hood gave Wall Street confidence by pairing disciplined expense control with a whopping $10.2 billion cash return to shareholders
It also didn’t aggressively raise its capital expenditure plans like others in Big Tech, such as Alphabet (GOOG, GOOGL) and Meta (META).
Profit estimates have trended higher since the late-July earnings report
The bottom line:The bulls are back in the driver’s seat on Microsoft. Don’t expect them to give up the wheel for a little while.
Brian Sozziis Yahoo Finance’s Executive Editor, host of thePower Players with Brian Sozzipodcast, and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X@BrianSozzi,Instagram, andLinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance
