Microsoft (NASDAQ:MSFT) stock is trending on Wednesday, backed by a strong year-to-date performance that saw its shares climb over 20%, significantly outperforming the NASDAQ Composite Index’s over 8% returns.

This momentum is attributed to robust growth in the company’s cloud and artificial intelligence (AI) divisions, with exclusive licensing deals and access to OpenAI’s models bolstering its Azure cloud business and pushing its market value closer to $4 trillion.

After laying off over 15,000 employees in 2025, the company remains focused on its $80 billion AI investment. This substantial commitment reflects its conviction that AI will be the key growth engine for the enterprise technology sector.

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Reinforcing this strategy, Microsoft and the National Football League (NFL) announced on Wednesday that they have extended their multiyear partnership to bring AI innovation across the league. The league will use Copilot and Azure AI to enhance sideline evaluations, scouting, and stadium operations.

The NFL upgraded its Sideline Viewing System with 2,500 Microsoft Surface Copilot+ PCs, giving coaches, players, and analysts real-time data to make faster, more strategic decisions. It also expands AI use into scouting, game-day operations, fan engagement, and back-office functions.

The announcement followed Microsoft’s strong fiscal fourth-quarter earnings, released on July 30, which once again topped Wall Street expectations. 

The tech giant reported quarterly revenue of $76.44 billion, up 17% year-over-year, topping Wall Street’s estimate of $73.80 billion. Earnings per share came in at $3.65, beating the consensus of $3.37.

Key Analyst Insights

Analysts widely applauded Microsoft’s fourth-quarter results, pointing to the company’s strong performance in cloud and AI as evidence of its growing dominance in the sector, though some flagged risks tied to capacity and valuation.

Wedbush analyst Dan Ives described the quarter as a “shining moment” for Microsoft, highlighting what he called “eye-popping” strength in cloud and AI. He said that the company is entering the next phase of AI monetization, with AI already reshaping cloud growth.

Cantor Fitzgerald’s Thomas Blakey echoed the optimism, noting that demand for Azure services is outstripping supply, particularly as Microsoft’s largest customers expand their core infrastructure and AI workloads. He emphasized that 80% of Fortune 500 companies now use Microsoft’s infrastructure services, positioning them to leverage its heavy capital spending over the long term. However, he acknowledged that capacity constraints remain a challenge.

Bank of America’s Brad Sills offered a particularly bullish perspective, calling Microsoft a top pick after another “robust quarter.” He highlighted broad-based strength across Azure and Office, noting Microsoft’s success in cloud migration deals for its large enterprise clients. For Sills, the results reaffirmed the view that Microsoft is a prime beneficiary of AI in applications and infrastructure.

Price Action: MSFT stock is trading lower by 0.68% to $506.43 at last check Wednesday. 

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