Microsoft's fiscal fourth-quarter results beat Wall Street estimates, with cloud and AI driving the numbers, according to TradingView. Investors responded emphatically: the Financial Times reports Microsoft surged 15% as both the results and its data centre leases cheered investors, while Business Insider says the stock was on pace for its biggest single-day jump in 18 years.
The enthusiasm didn't stop at Microsoft. Because Microsoft's Azure cloud business is one of the largest buyers of AI hardware on earth, its spending plans function as a demand forecast for everyone who makes the chips. Strong Azure growth boosted confidence in AI demand and cloud spending across the sector, lifting Nvidia, Nebius and Amazon, according to MSN.
Chipmakers rallied hard. Intel and AMD each climbed about 13%, with Intel trading at $92.67, and Taiwan Semiconductor gained 7%, per AOL — a move it described as a lesson in how quickly the tide can turn in financial markets. Benzinga reported SanDisk up 24%, and MarketWatch noted Micron, SanDisk and other chip stocks getting major boosts in the wake of Microsoft's earnings.
Not everyone credits Microsoft alone. Seeking Alpha reported that the surge in AI and memory chip names — SanDisk, Micron, AMD and Nvidia — was likely tied to relief from hedge fund selling unwinding, a mechanical pressure separate from the fundamentals.
The strategic read came from Goldman Sachs, which, per Bloomberg, said Microsoft has shown Wall Street how its AI bet pays off. Business Insider framed it similarly: Microsoft has laid a market blueprint for other AI giants reporting next.
Context matters here. The Motley Fool was writing about the AI trade unwinding — a reminder that this rally follows a stretch of doubt about whether enormous AI capital spending would ever show up in profits.
Why it matters: Microsoft just gave investors their first hard evidence this earnings season that AI spending is converting into results, setting the bar for every megacap and chipmaker that reports after it.