Brokerages have raised its mean target price to US$560.90
MICROSOFT added nearly US$450 billion in market value on Thursday (Jul 30), the largest one-day gain on record for a company, after it forecast stronger-than-expected cloud growth and signaled continued cash generation through its new fiscal year.
The software giant’s shares closed up more than 15 per cent, lifting its market capitalisation to US$3.35 trillion, surpassing chip giant Nvidia’s previous record one-day gain of US$441 billion 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.
The results offered fresh evidence that Microsoft‘s massive AI investments are beginning to pay off, helping ease investor concerns that heavy spending on data centres and computing infrastructure could outpace demand.
Microsoft has lagged some of its “Magnificent Seven” peers this year, with its stock down more than 18 per cent up to Wednesday’s close.
At least nine brokerages raised the target price on the stock, with the mean target now US$560.90.
Microsoft said its spending plans remain unchanged and that it expects capital expenditures of US$50 billion for the fiscal first quarter of 2027 and US$175 billion for the 2026 calendar year.
In its first quarter, Microsoft expects Azure to grow 45 per cent on a constant-currency basis, well above analysts’ estimate of a 40.92 per cent increase, according to Visible Alpha data.
“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,” Direxion’s head of capital markets, Jake Behan, said. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services