Investing.com — stock rose +2.75% in mid-day trading today to reach $425.35, extending a recovery from its 52-week low of $356.28 hit in late March, as a combination of a software stock recovery, lingering post-earnings momentum, fresh analyst upgrades, and a positive corporate action drove renewed buying interest. Microsoft’s fiscal Q3 2026 results, reported on April 29, showed revenue of $82.9 billion — an 18% year-over-year increase — with operating income rising 20% and diluted EPS of $4.27. That EPS figure beat the consensus estimate of $4.06, representing a 5.18% positive surprise.
Azure, Microsoft’s cloud computing unit, surged 40% in the quarter — its 11th consecutive quarter of 30%-or-better revenue growth — as demand for compute power and AI services continued to power results. Microsoft’s AI revenue surpassed an annual run rate of $37 billion, a 123% year-over-year increase. Adding to today’s positive tone, DBS issued a Buy rating on MSFT today, while investors also responded positively to Xbox CEO Asha Sharma’s decision to cancel Copilot for gaming consoles, framing the move as part of a broader reset to “get the business back on track” — a sign of disciplined AI spending that the market welcomed.
Cybersecurity and enterprise software stocks had been market laggards in 2026, but they snapped a brutal losing streak recently by joining the broader market rally that saw all losses from the U.S.-Iran war regained by the Dow Jones Industrial Average and S&P 500. Today, the NASDAQ is up +0.56% — outpacing the S&P 500’s modest +0.16% gain — providing a constructive backdrop for large-cap tech. The prior session saw a powerful AI chip rally, with AMD, Super Micro Computer, and Nvidia all surging on strong earnings and demand signals, lifting sentiment across the entire hyperscaler and cloud ecosystem in which Microsoft competes.
Microsoft’s valuation had reset 14% year-to-date despite accelerating fundamentals, with management guiding another year of double-digit revenue and operating income growth while maintaining strong return on equity and operating margins. Wall Street’s 55 of 58 Buy-rated analysts see significant upside to their consensus target price, betting that Microsoft’s $37B AI revenue run rate and 40% Azure growth will absorb the company’s heavy AI infrastructure spending as monetization accelerates. Together, the post-earnings fundamental re-rating, fresh institutional buy coverage, disciplined corporate actions, and a tech-friendly macro environment are combining to push MSFT meaningfully higher in today’s session.
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