Microsoft Surpasses $4 Trillion Market Cap, Fueled by AI Growth and Strong Earnings
Microsoft achieved a historic milestone on Thursday, July 31, 2025, becoming the second company globally to exceed a $4 trillion market capitalization. This surge is attributed to robust quarterly results that significantly outperformed expectations, driven by advancements in cloud computing and artificial intelligence (AI).
Record-Breaking Performance
The Redmond, Washington-based tech giant saw its stock price increase by 4.62% around 4 p.m. Thursday on the New York Stock Exchange, closing at $536.93. Year-to-date, Microsoft’s stock has risen nearly 30%. The company’s fourth-quarter performance, exceeding analyst forecasts, was particularly notable for its continued growth in cloud services and AI technologies.
Financial Highlights
Microsoft reported a net profit of $27.2 billion, a 24% increase year-over-year. Revenue climbed to $76.4 billion, representing an 18% increase over the same period last year, according to results released on Wednesday. This consistent delivery of strong financial results, quarter after quarter, has been largely propelled by the rapid expansion of generative AI since late 2022.
AI Drives Market Enthusiasm
Alongside Meta (formerly Facebook), which also reported exceeding expectations, Microsoft “pulverized expectations, triggering a new wave of enthusiasm for AI which contributes to boosting the equity market,” noted one analyst. The company’s success mirrors that of Nvidia, the semiconductor specialist that became the first company to surpass the $4 trillion valuation earlier in July, also benefiting from investor excitement surrounding AI-related investments.
Workforce Adjustments Amid Growth
Despite the positive financial outlook, Microsoft announced in early July plans for additional workforce reductions, following an initial wave of cuts in May. These adjustments involve streamlining certain organizational levels. A company spokesperson indicated that the total impact will affect less than 4% of the workforce, equating to approximately 9,000 employees out of a total of 228,000.
A New Economic Benchmark
Microsoft’s entry into the $4 trillion club signifies a new benchmark in corporate valuation, exceeding the gross domestic product (GDP) of major economies like France, the United Kingdom, and India. This achievement underscores the growing influence of technology companies in the global economic landscape and the immense value investors place on innovation, particularly in the field of AI.
