To The Moon

Microsoft surged 15% after delivering stronger-than-expected quarterly results, as robust Azure growth helped ease concerns over the company’s massive AI spending. Several Tiger traders caught the rally. $Microsoft(MSFT)$

👏 Congrats to @Aaronykc, who bought the dip in Microsoft and made US$9,901!

👏 Congrats to @3i4i592654, who made US$9,017!

👏 Congrats to @Terra_Incognita, who made US$9,005!

👏 Congrats to @xiaomaoyizi , who made US$6,538!

👏 Congrats to @今晚打黃毛, who made US$ 6,610!

Together, the five traders made more than US$41,000 from the rebound.

Why Is Microsoft Rallying?

$Microsoft(MSFT)$ reported quarterly revenue of US$90.01 billion, up 18% year over year, while adjusted earnings came in at US$4.74 per share. Both figures beat Wall Street expectations.

Revenue from Azure and other cloud services jumped 43%, beating market expectations of around 40%. Microsoft Cloud revenue reached US$59.3 billion, up 27%, while Azure’s annual revenue surpassed US$100 billion for the first time.

The results helped answer one of Wall Street’s biggest questions: Is Microsoft’s massive AI investment actually generating returns？So far, the answer appears to be yes. Demand for Azure’s computing capacity remains strong as more companies deploy AI applications. Microsoft 365 Copilot has also surpassed 30 million paid seats, up from more than 20 million in April, suggesting that enterprise AI adoption is moving beyond trials and into real spending.

AI Spending Is Paying Off, but the Bill Is Still Growing

Microsoft’s capital expenditure, including finance leases, reached US$41 billion during the quarter, up 69% from a year earlier. At the same time, its remaining performance obligations rose 84% to US$678 billion, providing strong visibility into future cloud and software revenue.

However, the company’s aggressive AI buildout continues to put pressure on cash flow. Free cash flow fell 23% to US$19.6 billion, while management expects capital spending to increase again in fiscal 2027.

That leaves Microsoft with a clear challenge: Azure and Copilot must continue growing fast enough to justify the company’s rising AI infrastructure costs.

Microsoft’s latest earnings showed that its AI investments are beginning to translate into stronger cloud revenue. But after a 15% rally, expectations are now even higher.

Do you think Microsoft can keep climbing, or would you take profits after the post-earnings surge? $Microsoft(MSFT)$

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