Microsoft CEO Satya Nadella (Jason Redmond/Getty Images)

Microsoft joins the $4 trillion club, plans to spend over $30 billion on capex this quarter

Microsoft’s blowout FY25 Q4 earnings powered a surge in shares making it the second $4 trillion company, joining an elite club shared only by Nvidia.

Jon Keegan

7/31/25 10:12AM

Microsoft had a blowout fiscal fourth quarter, beating estimates for earnings and revenue. In premarket trading, shares surged over 8%, pushing the valuation above $4 trillion, an elite club only shared with Nvidia.

On the earnings call last night, CEO Satya Nadella summed up the company’s impressive fiscal year performance:

“It was a very strong close to what was a record fiscal year for us. All up, Microsoft Cloud surpassed $168 billion in annual revenue, up 23%. The rate of innovation and the speed of diffusion is unlike anything we’ve seen.”

Like Nvidia, Microsoft’s surging valuation is powered by white-hot demand for AI computing. The legacy tech giant has nimbly positioned itself for success in a fast-moving, young AI industry:

🤝 It has a big (if strained) partnership with market leader OpenAI.
☁️ Most importantly, Microsoft’s Azure cloud computing platform and massive data centers (over 400 of them) are AI-model-agnostic — they will sell computing for pretty much any company and any AI model or application.

Indeed, Azure’s performance was a big driver of growth for the quarter, with Azure (and other cloud services) revenue growth increasing 39% year on year.

For the first time, the company revealed how much money Azure has made: more than $75 billion in annual revenue.

That number could have been even higher if supply weren’t an issue.

“While we brought additional data center capacity online this quarter, demand remains higher than supply,” CFO Amy Hood said.

The demand is so high for Microsoft’s cloud computing services that it has a significant contracted backlog — $368 billion worth.

To catch up with that demand, Hood said on the earnings call last night that the company continues to spend huge on capex: “We expect Q1 capital expenditures to be over $30 billion driven by the continued strong demand signals we see.”

But Hood cautioned that the capex seen in FY25 might not be the norm:

“Capital expenditure growth, as we shared last quarter, will moderate compared to FY25 with a greater mix of short-lived assets. Due to the timing of delivery of additional capacity in H1, including large finance lease sites, we expect growth rates in H1 will be higher than in H2.”

Update (10:23 a.m. ET): a previous version of this piece attributed Google’s AI model to Microsoft.

Matt Phillips3/13/26

Oil settles Friday at highest level since start of war

US oil prices moved higher in afternoon trading Friday, sapping strength from the stock market as they posted their highest close since the start of the Iran war.

After another day where the Strait of Hormuz was essentially closed to global tanker traffic, US futures for West Texas Intermediate settled up 3.1% at $98.71 a barrel for an 8.6% weekly gain, per Dow Jones data.

American officials have discussed using the US Navy to escort tankers through the narrow waterway between Iran and Oman, but have said plans for such convoys are not ready yet. However, it is unclear if military convoys would bring an end to the war-related dislocations in the oil market.

“It could help,” Tom Liles, senior vice president of upstream research at energy consulting firm Rystad, told Sherwood News in a recent interview. “It could also go in a lot of different directions if a Navy ship is hit or if a tanker is hit.”

Oil Posts Weekly Gains As Middle East Conflict Drags On

Tasha Matsumoto

3/13/26

Stocks post third straight week of losses as Brent crude surges above $100

Stocks wiped out early gains to close lower amid the ongoing war in Iran.

Matt Phillips3/13/26

Memory stocks rebound off last weeks losses

Memory stocks Micron, Sandisk, Western Digital, and Seagate Technology Holdings rose again Friday, putting these crucial providers of chips for AI inference work on track for big weekly gains after last week’s steep losses following the outbreak of war with Iran.

There’s no obvious trigger for the move higher for these shares this week, other than a bit of a recovery in the AI trade more broadly — AI beneficiaries like IT cable and connections maker Amphenol and custom chip and networking company Marvell Technology clawed back some gains this week — perhaps due Oracle’s earnings earlier, and some mean reversion to boot.

Micron is due to report earnings after the close of trading on Wednesday, with the company catching a couple price target hikes this week, including one from Wedbush on Friday.

Sandisk is something of a different story, as its enormous gains over the last 12 months — roughly 1,200% — have made it a momentum play beloved by the retail crowd.

It was up about 20% this week at around 11 a.m. ET. And its nearly 170% gain this year keeps the stock on top of the S&P 500, in terms of price performance.

Luke Kawa

3/13/26

The S&P 500’s internals are awful... while it’s still less than 5% from its record closing high

The breadth of negative momentum within the index’s constituents is even worse than at the tariff-induced market bottom in April 2025.