Microsoft shares closed at a record high for the first time in about a year, capping a four-month rally driven by growth in its artificial intelligence and cloud businesses.
The stock rose 0.4% to $543.45 on the 13th, surpassing the previous peak set in October 2025. The gain from its June low now exceeds 54%, adding roughly $1.4 trillion in market value over that period. Bloomberg attributed the advance to steadily improving investor views of the company overall and of its position in AI.
The milestone marks a sharp reversal from just a few months ago. Microsoft ranked among the worst performers in the S&P 500 in the first half of this year, weighed down by concerns that its heavy spending on AI infrastructure was not translating into sufficient returns. Worries about potential threats facing software companies added to the pressure. The stock fell 17% in June alone, its worst month since 2000, erasing about $600 billion in market value.
The turning point came with late-July earnings, which showed revenue from the cloud computing business growing at its fastest pace in four years. The stock jumped 16% the following day, helping Microsoft to its best quarter since 1998. At least two brokerages raised their ratings on the stock to buy immediately after the results, signaling confidence in the company's ability to convert demand for AI services into revenue.
Revenue at Azure, Microsoft's cloud platform, surged as corporate adoption of AI services widened. Revenue from Azure and other cloud services rose 43% from a year earlier in the quarter, the fastest growth in four years, and Azure's annual revenue topped $100 billion for the first time. Paid users of Microsoft 365 Copilot, the company's AI assistant service, climbed past 30 million, evidence that its AI technology has been successfully monetized.
Even with the recent rally, the stock still lags on a year-to-date basis because of the first-half slump. Microsoft is up about 12% this year, trailing the 21% gain in the technology-heavy Nasdaq 100 and the 14% rise in the S&P 500.
Of the 72 analysts covering Microsoft tracked by Bloomberg, 68 currently have buy ratings and none recommend selling. Their average price target is $584, implying about 8% upside over the next 12 months from the latest close.
