NEW YORK, August 2, 2026, 15:03 EDT — U.S. markets close with Microsoft stock up sharply.
- Microsoft ended Friday at $464.72, rising 3.02% and advancing 21.8% for the week.
- Estimated approximately $203 billion in commercial RPO falls within a 12-month recognition period.
- Microsoft forecast Azure revenue to increase by around 45% on a constant currency basis, above consensus estimates of 40.92%.
Microsoft Corporation NASDAQ:MSFT closed at $464.72 on Friday, marking a 3.0% increase during the session. Shares climbed 21.8% for the week, following earnings released on Wednesday. U.S. markets did not open on Sunday.
Microsoft’s market capitalisation rose by about $617 billion over the week, with Thursday’s session accounting for a record single-day gain of almost $450 billion.
Investor confidence was driven more by contracted revenue than by headline profit. Commercial remaining performance obligations climbed to $678 billion, reflecting an 84% increase from a year earlier.
Management anticipates that around 30% of the balance will convert to revenue over the next twelve months. This suggests approximately $203 billion, or 61% of expected fiscal 2026 revenue. The figure is based on an independent calculation, not official company guidance.
The weekly data reflected a re-rating for individual companies, not a spike across the wider index.
| Instrument | Friday | Week |
|---|---|---|
| Microsoft NASDAQ:MSFT | rallied 3.02% | jumped 21.75% |
| Nasdaq Composite | rose 1.00% | up 1.60% |
| S&P 500 | gained 0.70% | added 1.00% |
| Dow Jones Industrial Average | increased 0.53% | climbed 1.00% |
Microsoft surpassed the Nasdaq by roughly 20.2 percentage points over the week. Friday’s movement further examined if the previous day’s record surge would be sustained.
The latest quarter’s results, along with the outlook for the first quarter, both surpassed Wall Street expectations.
| Metric | Reported or guided | Consensus | Variance |
|---|---|---|---|
| Q4 revenue | $90.00 billion | $87.62 billion | +2.7% |
| Q4 adjusted EPS | $4.74 | $4.24 | +11.8% |
| Q4 Azure growth | 43.0% | 39.98% | +3.02 points |
| Q1 revenue midpoint | $90.40 billion | $89.66 billion | +0.8% |
| Q1 Azure growth, constant currency | 45.0% | 40.92% | +4.08 points |
Azure delivered the main momentum, surpassing consensus growth estimates by 3.0 percentage points. Guidance for growth in the following quarter came in 4.1 points higher than anticipated. “The results suggested meaningful progress,” said Jake Behan at Direxion. Reuters
The cash and backlog situation showed a less clear trend, even as robust demand was evident. The ratios calculated below are based on Microsoft’s reported numbers.
| Demand and cash marker | Disclosed figure | Derived investor measure |
|---|---|---|
| Commercial RPO | $678 billion; +84% | 2.04x projected FY2026 revenue |
| Next-12-month RPO share | Approximately 30% | Roughly $203.4 billion; 61.3% of FY2026 revenue |
| RPO excluding OpenAI | +25% | Indicates broader demand outside frontier-model firms |
| Q4 capital expenditure | $41.0 billion | 45.6% of revenue for the quarter |
| Q4 free cash flow | $19.6 billion | 21.8% margin; decrease of 23% from a year ago |
Cash flow continues to limit the present investment phase. Capital expenditures represented 45.6% of revenue for the quarter, with a free cash flow margin standing at 21.8%.
Microsoft management reported that customer demand continued to outpace the company’s computing resources. CEO Satya Nadella stated Azure revenue “surpassed $100 billion for the first time.” Microsoft opened 31 new data centers in the quarter. Microsoft
Recent cloud earnings highlight contrasting growth trends and spending patterns. The companies’ reports are not strictly comparable.
| Company | Latest cloud growth | Cloud-related revenue | Contracted commitments | Calendar 2026 capex |
|---|---|---|---|---|
| Microsoft NASDAQ:MSFT | Azure up 43% | Azure revenue undisclosed; Intelligent Cloud at $39.3 billion | Commercial RPO totals $678 billion | Estimated $175 billion |
| Amazon.com NASDAQ:AMZN | AWS up 37% | AWS at $42.2 billion | AWS backlog stands at $496 billion | $220 billion |
| Alphabet NASDAQ:GOOGL | Google Cloud up 82% | Google Cloud at $24.8 billion | Cloud backlog reaches $514 billion | $195–205 billion |
Microsoft’s revenue and backlog figures include a wider selection of products beyond just Azure. Nevertheless, its stated commitment pool stayed ahead of the other two.
Copilot provided Microsoft with an additional way to generate revenue from its infrastructure investments. The number of paid Microsoft 365 Copilot seats surpassed 30 million, up from 20 million the previous quarter. More Personal Computing revenue decreased by 4%, and Xbox content and services revenue declined 10%.
Risks: Capital spending in the first quarter is set to top $50 billion with the updated lease accounting. Free cash flow dropped 23% compared with the previous year. Continued softness in PC and gaming could weigh on the revenue mix.
Microsoft’s current schedule shows no investor events until August 27. The Institute for Supply Management will release July manufacturing figures on Monday. The U.S. jobs report for Friday is due at 08:30 EDT.
The immediate challenge is focused on converting backlog into Azure expansion, rather than generating new demand. Microsoft aims to drive Azure growth and minimize margin pressure. Executives forecast that the margin reduction in fiscal 2027 will stay under one percentage point.
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