Microsoft on Thursday became the second company in history to surpass a market valuation of $4 trillion, a milestone reached after reporting stronger-than-expected second-quarter earnings.
Shares of Microsoft climbed in early trading following the earnings release, extending the company’s lead in cloud computing and enterprise software. The results underscored the company’s expanding reach across its key divisions.
Microsoft hit the milestone Thursday morning following its strong Q4 earnings report, in which it also said its Azure business brought in $75 billion over the prior year. The company’s stock price has climbed more than 110% since the debut of OpenAI’s ChatGPT in November 2022.
Some contexts
The Fortune Global 500 ranks Microsoft as the 22nd largest company in the world by revenue a reminder that its market capitalization reflects not only scale but also investor confidence in its long-term growth. Chip giant Nvidia previously passed the threshold on July 9
Nvidia’s rise, however, has shifted the balance of power in technology. The California-based chipmaker reached a $4 trillion valuation on Wednesday after its stock rose 2.5% to $164. The company’s meteoric ascent has redefined the global tech hierarchy. Just two years ago, Nvidia traded at $14 a share; it crossed the $2 trillion threshold in early 2024 and $3 trillion in June, before reaching Wednesday’s historic mark.
The broader technology sector reflected the surge. The S&P 500 technology index gained 1.2 percent, while the communication services index jumped more than 3 percent, both setting record highs.
What to know
At mid-morning, the Dow Jones Industrial Average rose 88.73 points, or 0.20%, to 44,550.01. The S&P 500 gained 45.18 points, or 0.71 % to 6,408.08, and the Nasdaq Composite climbed 245.09 points, or 1.16% , to 21,374.76.
For Microsoft, the latest milestone reflects steady gains in its cloud infrastructure and continued integration of AI across its services. While Nvidia dominates the hardware powering AI, Microsoft’s growth suggests it remains one of the most pivotal players in the digital transformation sweeping global markets.
While sweeping US tariffs had investors bracing for tighter business spending, Microsoft’s strong earnings have shown that the company’s books are yet to take a hit from the levies.
But despite its rise, Microsoft has been streamlining its workforce in recent months. The company said earlier this month that it would cut around 9,000 employees, approximately 4% of its staff, its largest reduction since 2023. Those layoffs came after the company cut 6,000 workers in May.
