Microsoft (MSFT) posted better-than-expected quarterly earnings in its Wednesday report, sending the stock higher on Thursday. The company behind Windows has now eclipsed a $4 trillion market cap, joining Nvidia (NVDA) in the exclusive club. Microsoft’s earnings were a welcome sight for investors, with the stock surging over 4%.

Microsoft saw a strong boost in its earnings from its cloud operations as well as elevated PC shipments, driven by the stocking up of inventories ahead of tariffs. The company also finally disclosed the actual size of its Azure public cloud business, reporting the unit’s annual revenue has surpassed the $75 billion mark. Microsoft’s cloud revenue increased by 27% year-over-year, with Azure revenue growing 39% in Q4, reflecting robust demand in its AI and cloud services. MSFT’s P/E ratio has also risen from 28.83x in Q1 2025 to 39.42x in Q3 2025, indicating growing market confidence despite higher valuations.

Other Factors Helping Microsoft (MSFT) Trade Higher

Furthermore, Microsoft’s MSFT stock is nearing a new deal with OpenAI to give it access to the latter’s technology and help OpenAI steer away from being “for-profit.” The companies have discussed new terms that would let Microsoft use OpenAI’s latest models and other technology, according to sources close to the negotiated deal. The news gave MSFT a solid bump upwards, leading into earnings.

If Microsoft and OpenAI were to reach this new deal, MSFT investors could flock to the stock and send it higher. Over the last several months, the developer behind Windows has been taking an AI-first initiative, even shedding jobs to automate tasks with artificial intelligence technology. Investors appear to think of these moves as positive and have sent their price projections for MSFT stock higher of late. Forecasts are being revised across Wall Street, projecting $525 as the next goal. That could be achieved if Microsoft and the ChatGPT developer ink a new deal.

Also Read: Microsoft (MSFT) Nears New OpenAI Deal: MSFT to Rally?

Big tech dominated quarterly earnings in the past week. Besides Microsoft, Meta and Alphabet have had successful quarterly earnings recently. Amazon (AMZN) is also expected to trade higher on Friday, come today’s earnings report as markets close.