Microsoft shares rose in pre-market activity, gaining momentum that followed a stronger-than-expected fiscal 2026 fourth-quarter earnings release. The company reported $90 billion in revenue for the quarter, an 18% increase from the prior year that outpaced Wall Street forecasts. Cloud performance was a standout, with Azure revenue jumping 43% - a pace that exceeded Microsoft’s own guidance range of 39-40%.
On the company’s earnings call, CEO Satya Nadella noted that Azure has surpassed $100 billion in annual revenue for the first time in Microsoft’s history - a milestone management presented as further evidence of the company’s ability to monetize AI-related offerings. Management also disclosed a commercial order backlog totaling $678 billion, reflecting an 84% year-over-year increase and providing extensive forward revenue visibility for the business.
Investor response was reinforced on the analyst front. In its August update, Goldman Sachs added Microsoft to its U.S. Conviction List, with analyst Gabriela Borges forecasting that EPS growth will accelerate beyond the roughly 12% pace expected for fiscal 2027. Across the Street, analysts raised their price targets sharply following the earnings beat, lifting the consensus mean to a level above $560.
Commercial adoption of Microsoft’s AI products was highlighted as another confirming datapoint. Nadella cited Microsoft 365 Copilot as having surpassed 30 million paid seats, a figure the company used to illustrate the scale of uptake for its AI suite.
The broader market backdrop contributed to the positive tone. Major benchmarks extended gains, with the S&P 500 up 0.6%, the Dow Jones rising 1.1%, and the Nasdaq edging higher by 0.1% in the same trading frame. The Federal Reserve’s decision at its late-July meeting to hold the federal funds rate steady at 3.50%-3.75% removed an important near-term risk for growth-oriented equities, according to the market reaction captured around the earnings period.
Market participants also pointed to continued strength among hyperscalers and robust cloud spending by enterprise customers as supportive context for Microsoft’s results. Those sectorwide dynamics, together with the company’s reported top-line beat and expanding backlog, have sustained the post-earnings rally into the pre-market session.
As of the latest pre-market quotes in the report, Microsoft was trading at $475.20, recovering ground from its 52-week low of $349.20. The stock’s pre-open uptick was reported as 2.3% in one reference and reflected elsewhere in intraday ticker snapshots as MSFT+3.02%.
Outlook
The combination of a historic quarterly performance, an AI-related revenue milestone for Azure, a sizable and rapidly growing commercial backlog, renewed institutional conviction from Goldman Sachs, and a supportive macro environment have together underpinned Microsoft’s continued gains in pre-market trading.