Microsoft’s AI boom powers higher, even as the chart cools and lawsuits linger
Published on 08/04/2026 at 14:32 | Redaktion boerse-global.de
Microsoft’s recent run has been powerful enough to put the stock back near its highs, but the latest move was down rather than up. On Tuesday, the shares fell 2.08 percent to EUR 414.75, after closing at EUR 423.55 the day before. Even with that pullback, the backdrop is still dominated by a very sharp rerating driven by the company’s latest quarter and the market’s growing conviction that Microsoft has turned AI into a real revenue engine.
That optimism has been visible in the share price. Over seven days, Microsoft has gained 20.04 percent; measured from a week earlier, the advance is 22.59 percent. Over one month, the stock is up 22.71 percent. The latest surge was triggered by a strong earnings report at the end of July, which showed adjusted earnings per share of USD 4.74 against expectations of USD 4.24, and revenue of USD 90.01 billion versus the USD 87.62 billion analysts had forecast. Net profit rose to USD 35.77 billion from USD 27.23 billion a year earlier.
The cloud business remains the core of the story. Azure and the wider cloud division grew 43 percent, and cloud revenue reached USD 59.3 billion. Microsoft also said it expects even stronger cloud growth in the coming quarters. In a separate marker of scale, Azure crossed the USD 100 billion annual revenue threshold for the first time. For investors, that matters because it shows the AI and cloud thesis is not just about future potential anymore; it is already showing up in the numbers.
Satya Nadella has been pushing that message further. On the latest earnings call, he said Microsoft will launch a “Copilot Super App” this year, combining chat, coding assistance and autonomous “Autopilots” in one platform for consumers and businesses. More than 30 million users already pay for Microsoft 365 Copilot. The plan is to turn that base into a steadier, higher-margin revenue stream.
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The company’s investment priorities have also become clearer. In early July, Microsoft cut around 4,800 jobs, equal to about 2.1 percent of its global workforce. The reductions hit the weaker Xbox division and parts of sales, with several gaming studios closed or sold. The message from management was unmistakable: resources are being shifted away from peripheral businesses and toward the infrastructure needed to support AI expansion.
That combination of rapid growth and heavy investment helps explain why the stock has moved so quickly, but it also explains why traders are now seeing some fatigue. On a technical basis, the shares look stretched. One measure of momentum, the 14-day RSI, stands at 77.8. Another, the annualized 30-day volatility, is 53.34 percent. Microsoft is also 21.78 percent above its 50-day average of EUR 347.81 and 13.25 percent below its 52-week high of EUR 478.10. The stock remains 35.05 percent above its 52-week low of EUR 307.10, while the 12-month performance is still minus 10.41 percent, which leaves room for the recent rebound without putting the shares in outright bubble territory.
Analysts have not turned cautious. The average price target is EUR 488.79, implying around 18 percent upside from current levels, or about 15 percent depending on the reference point. Microsoft’s market capitalization is around EUR 2,996 billion. That scale makes short-term swings unavoidable when a stock has risen more than 20 percent in a month.
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The legal overhang has not gone away either. Several class-action lawsuits accuse Microsoft of misleading investors about Copilot’s performance, competitiveness and commercialization, as well as failing to disclose the trade-off between AI investment and Azure capacity in 2025 and 2026. Law firms specializing in shareholder rights have set an August 11 deadline for additional plaintiffs to join. One of the suits points to a roughly 10 percent share-price drop after weak quarterly results earlier this year, when Microsoft acknowledged slower Azure growth and disappointing Copilot adoption.
For now, though, the market’s focus is still on the quarter rather than the courtroom. The latest decline looks more like a pause after a very fast advance than the start of a broader reversal. Microsoft has delivered the cloud growth investors wanted, and it has done so while pushing deeper into AI products that are already being paid for at scale. The harder question now is not whether the strategy is working. It is how long the stock can keep outrunning the speed of the business itself.
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