Meta Platforms and Microsoft earnings boost confidence in the artificial intelligence (AI) sector, leading to a spike in related stocks and ETFs.
MSFT's third-quarter fiscal 2025 results reflect strength in the AI business and Copilot adoption, backed by accelerating growth in its Azure cloud infrastructure unit.
Microsoft Corporation NASDAQ: MSFT stock shot up more than 10% in early trading the day after it delivered third quarter 2025 earnings that can rightly be described as a home run. The move in the stock has now erased all of the stock's losses since February 2025.
MSFT reports blowout third-quarter fiscal 2025 results powered by cloud computing and AI growth.
Microsoft's FQ3 2025 earnings report shows a strong Rule of 40 score of ~52, driven by 15% growth and a ~37% net profit margin. I see good reasons for the score to further improve as its cloud segment grows at a rapid pace. I expect this segment to become its largest profit contributor in the near future and carry higher margins.
Microsoft reported record Q3 earnings, with revenues up 13% to $70.1 billion and strong growth in Azure and AI, driving the stock price higher. The company's cloud and AI segments are crucial growth drivers, with Azure sales growing 33%, surpassing expectations and highlighting robust demand. Despite trade environment concerns, Microsoft's cloud and AI services remain resilient, with tariffs having minimal impact on their primarily service-based growth.
Shares of Meta and Microsoft surged Thursday after earnings for two of the U.S.' handful of trillion-dollar companies came in well above expectations, kicking off a crucial week for on-edge big technology stocks as tariffs complicated investor appetite for artificial intelligence-driven growth.
Microsoft Corp (NASDAQ:MSFT) latest results landed with the force of a Raphinha shot from the edge of the box, at least according to analysts at Wedbush. After markets closed on Wednesday, the tech giant beat forecasts across the board, raised guidance, and made it clear that the AI boom is more than just hype.
Previous to this earning session, my main concern was a slowdown in data center demand, as noted by some reports pointing to a slowdown in Microsoft Corporation's data center buildout. My concern is now gone after FQ3 2025 results. Revenue from Azure grew 33% YOY. Furthermore, Microsoft's AI business drove 16 pps of that improvement. It seems that the limiting factor to burn through their CapEx is the constraints around power supply and not data center demand.
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Microsoft Corp.'s (NASDAQ: MSFT) earnings impressed investors.
Microsoft beat analyst expectations with 13% YoY revenue growth and 16% YoY operating income growth, driven by strong performance across all business segments. Azure's 33% YoY growth and positive Q4 guidance (Azure growth at 34-35% YoY) highlight sustained cloud momentum, boosting investor confidence. Microsoft's stock valuation has depreciated 15% from all-time highs, creating an attractive buying opportunity given the strong earnings and growth outlook.