Microsoft shares gained 23.4% over three sessions, their best such stretch since October 2000, after last week's earnings showed accelerating Azure growth and Copilot topping 30 million paid seats. The rally has pushed Microsoft stock up about 3.3% for 2026 to date, erasing its year-to-date losses.
Microsoft's stock rose 5.2% on Monday afternoon. That extended a three-day gain to 23.4%, the tech giant's best such run since October 2000. Shares climbed 29.24% over three sessions that month, according to Dow Jones Market Data.
The rally has pushed Microsoft shares positive for 2026, up about 3.3% for the year to date, as concerns over its artificial-intelligence plans have eased.
Azure growth and Copilot gains fuel the rally
Microsoft's earnings report last week showed accelerating revenue growth in its Azure cloud business. The company's Copilot AI assistant has surpassed 30 million paid seats, with net seat adds more than doubling sequentially, according to CEO Satya Nadella.
Will Rhind, chief executive of exchange-traded-fund provider GraniteShares, said investors took those numbers as proof that Microsoft's AI investments are paying off. According to Rhind, Monday's move "isn't just an earnings hangover" but a rerating of Microsoft's progress on AI — meaning the market is starting to ascribe a higher multiple to the shares.
Hyperscaler spending enters uncharted territory
Luke Rahbari, a portfolio manager at Rational Equity Armor Fund, said the market is entering uncharted territory as hyperscalers ramp up AI spending to stay competitive. Still, in his view, the size of that spending by Microsoft and its peers is justified.
Microsoft told investors it doesn't expect negative free cash flow for its new fiscal year. Even as spending increases, Microsoft and its hyperscaler peers have said demand for AI capacity is outpacing the buildout, according to William Blair analyst Sebastien Naji.
Source: MarketWatch
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