On July 30, 2025, after the market closed, Microsoft (NASDAQ: MSFT) shares surged approximately 6.7% in after-hours trading, climbing from around $515 to $555. The rally followed the release of its fiscal Q4 2025 earnings (April 1 – June 30, 2025), which beat Wall Street expectations, driven by strong cloud and AI performance.
What sparked this surge? Let’s break it down.
📊 Microsoft’s Q4 FY2025 Earnings at a Glance
Microsoft reported:
- Revenue: $76.4 billion (vs. $73.89 billion expected, up 18% YoY)
- Adjusted EPS: $3.65 (vs. $3.37 expected, up 24% YoY)
- Intelligent Cloud Revenue: $29.8 billion (vs. $29.09 billion expected)
Source: Yahoo Finance, July 30, 2025
For comparison, in Q4 FY2024, Microsoft posted:
- Revenue: $64.72 billion
- EPS: $2.95
This year-over-year growth highlights Microsoft’s accelerating dominance in cloud computing and AI infrastructure.
☁️ Azure & AI: The Core Growth Engines
Microsoft’s Intelligent Cloud segment, including Azure, delivered $29.8 billion in revenue, beating expectations. Analysts anticipated 34–35% year-over-year Azure growth (per Investopedia), up from 29% in Q4 FY2024, reflecting strong enterprise demand for AI infrastructure.
Products like GitHub Copilot, which uses AI to generate code, are driving widespread enterprise adoption, boosting Azure’s compute and storage usage.
📈 Analyst Sentiment & Market Reaction
Before earnings, analysts were bullish:
- 20 analysts rated MSFT a “Buy”
- Average price target: ~$580
- Wedbush raised its target to $600, citing AI monetization via Copilot and Azure
The strong earnings beat and potentially strong guidance triggered the ~6.5% after-hours surge, reflecting renewed investor confidence.
🕓 Why the Price Moved After Hours
Microsoft, like most large-cap tech companies, releases earnings after the market closes (4 PM EDT). Institutional investors react during after-hours trading, often driving sharp price movements. Microsoft’s upside surprise sparked immediate buying, pushing the stock from ~$515 to $555.
📜 Historical Context
Microsoft’s stock doesn’t always jump post-earnings. Over the past five years:
- ~55% of earnings days ended lower
- Median decline on those days was 3–4%
Big beats, like Q4 FY2024’s 15% revenue growth, often result in significant rallies, as seen in Q4 FY2025.
✅ Bottom Line
Microsoft’s after-hours surge was fueled by:
- Revenue of $76.4 billion and EPS of $3.65, beating estimates
- Strong Intelligent Cloud performance ($29.8 billion)
- Ongoing AI leadership, including GitHub Copilot adoption
- Bullish analyst sentiment and potentially strong guidance
With Azure and AI adoption accelerating, Microsoft reaffirmed its tech dominance. Will this momentum keep pushing MSFT higher? Share your thoughts below!