Microsoft smashes market expectations
$345 Billion Added Before Wall Street Wakes Up
Just this morning, before the trading day even began, Microsoft (MSFT) sent shockwaves through the global financial market. Investors cheered the company’s latest earnings report, which beat Value Line’s forecast by a solid 7%. That vote of confidence sent the stock soaring over 9% in pre-market action, pushing Microsoft’s market value past a staggering $4 trillion. In a matter of moments, it added $345 billion—one of the biggest single-day leaps we've ever seen. Clearly, the bulls are running the show today.
Margins & Segment Trends
Cash Flow & Balance Sheet Observations
Cash and Equivalents rose from $18.3B to $30.2B YoY (+65%).
CapEx for Q4 hit $17.08B vs. $13.87B prior year—aggressive investment in infrastructure.
Shareholder Returns: $9.4B in repurchases and dividends in Q4 alone.
Free Cash Flow is not explicitly broken out, but it implies strong growth in net operating cash.
Noteworthy Anomalies
EPS Surprise: Actual EPS of $3.65 surpassed Value Line’s $3.41 estimate (+7%), likely due to operating leverage and cloud profitability.
Revenue Outperformance: $76.44B vs. estimated ~$73.72B (by ~3.7%), driven by better-than-expected Azure growth and advertising revenue.
Azure Growth Acceleration: Microsoft reported +39% YoY growth, exceeding both Q3 actuals (+33%) and management guidance (+34%).
CapEx Intensity: Substantial increase in property and equipment suggests a strategic infrastructure buildout likely tied to AI initiatives.
Working Capital Change: A Jump in cash and investments (+25%) alongside relatively flat liabilities indicates a strengthening liquidity posture.