Microsoft hit a $4 trillion market cap on Thursday, becoming the second public company after Nvidia to cross the milestone. The surge follows a blockbuster earnings report Wednesday.
Microsoft first hit $1 trillion in April 2019. Its rise to $3 trillion was slow compared to Nvidia, which tripled in value in about a year and topped $4 trillion on July 9.
The tech giant reported booming sales in its Azure cloud business. It also forecast a record $30 billion in capital spending for Q1 of its fiscal year, driven by soaring AI demand. 
Gerrit Smit, lead portfolio manager at Stonehage Fleming Global Best Ideas Equity Fund, said:
“It is in the process of becoming more of a cloud infrastructure business and a leader in enterprise AI, doing so very profitably and cash generatively despite the heavy AI capital expenditures.”
Trade breakthroughs ahead of Donald Trump’s August 1 tariff deadline have pushed indexes like the S&P 500 and Nasdaq to record highs.
Microsoft’s planned spending is the largest ever for a quarter, setting it up to potentially outspend rivals over the next year.
Meta Platforms also doubled down on AI during its earnings call Wednesday, forecasting Q3 revenue that beat Wall Street estimates thanks to AI boosting its ad business. Meta raised its annual capital spending guidance by $2 billion days after Alphabet did the same.
Wall Street’s confidence in Microsoft follows back-to-back record revenues since September 2022. The stock rally also got a boost after recent layoffs and aggressive AI investments aimed at cementing its lead.
Related: Wall Street delighted with Microsoft as it spends $100bn on AI
