Microsoft has joined Nvidia as the second publicly traded company to reach a $4 trillion market valuation, marking a historic milestone for the Redmond-based tech giant. The achievement, reached on Thursday, came on the heels of a blockbuster earnings report that underscored the company’s rapid expansion in cloud computing and artificial intelligence (AI).
The company’s shares surged as much as 8% in early trading before settling 4.5% higher, reflecting investor confidence in its long-term growth strategy. Microsoft’s multibillion-dollar investments in OpenAI and the integration of its AI-powered Copilot tools across the Office suite and Azure cloud offerings have proven transformative. Copilot now boasts over 100 million monthly active users, while Azure generated $75 billion over the past year. Since the debut of ChatGPT in November 2022, Microsoft’s stock price has more than doubled.
The $4 trillion milestone positions Microsoft alongside AI bellwether Nvidia, which hit the same valuation on July 9, 2025. Nvidia’s meteoric rise—tripling in value in just a year—has reshaped the tech hierarchy, while Apple trails at roughly $3.12 trillion. Together with Amazon, Alphabet, and Meta Platforms, these AI heavyweights now account for a quarter of the S&P 500, according to LSEG data.
Strong quarterly earnings also triggered a rally across the broader technology sector. The S&P 500 technology index gained 1.2%, the communication services index jumped 3%, and the Nasdaq Composite climbed 1.16% to a record 21,374.76. Meanwhile, chip supplier Nvidia reached a record $4.4 trillion market capitalization, and Amazon shares rose 2% ahead of its own earnings report.
Microsoft’s growth story highlights the dual engines of its cloud and AI businesses. Beyond its role as a software and enterprise leader, the company is increasingly viewed as a cloud infrastructure powerhouse. It forecast a record $30 billion in capital expenditures for the current fiscal quarter, signaling plans to outspend rivals in meeting soaring AI demand. “It is in the process of becoming more of a cloud infrastructure business and a leader in enterprise AI, doing so very profitably,” said Gerrit Smit, lead portfolio manager at Stonehage Fleming Global Best Ideas Equity Fund.
The milestone also comes amid internal restructuring. Microsoft confirmed it would cut about 9,000 employees, or 4% of its workforce, its largest reduction since 2023, following a prior 6,000-job cut in May. Despite these streamlining measures, the company continues to drive record performance, even as U.S. tariff policies and global market uncertainties loom.
For investors, Microsoft’s achievement signals both the scale of AI’s economic impact and the dominance of Big Tech in global markets. While Nvidia powers the hardware behind the AI revolution, Microsoft’s integration of AI into everyday business and cloud solutions cements its position as a central force in the digital transformation era.
As the company looks ahead, its unprecedented investment in AI and cloud infrastructure suggests it is well-positioned to shape the next phase of technological growth—and maintain its place among the world’s most valuable enterprises.
