Washington, July 31: Microsoft has reached a staggering $4 trillion (approx. Rs. 3,49,15,020 crore) in stock market valuation, becoming the second publicly traded company after Nvidia to cross this milestone. The surge follows a blockbuster earnings report that confirmed Microsoft’s aggressive push into artificial intelligence is already paying off.

The company’s shares jumped 4.5%, hitting new highs after soaring as much as 8% in after-hours trading. The momentum wasn’t just limited to Microsoft- its strong earnings, along with stellar results from Meta Platforms, boosted the entire tech-heavy sector. Amazon, Alphabet, and Nvidia all saw market value gains, pushing the S&P 500 and Nasdaq to fresh record highs.

Together, Nvidia, Microsoft, Amazon, Alphabet, and Meta, the top five players in AI now make up 25% of the S&P 500, according to LSEG data.

Microsoft’s AI Strategy Pays Off

Microsoft’s earnings call painted a clear picture: AI is now central to its business strategy.

• The company forecast $30 billion in capital spending for Q1 of the current fiscal year—a record-setting figure.

• Its Azure cloud platform saw booming sales, and Copilot AI tools surpassed 100 million monthly active users.

• The firm’s OpenAI partnership continues to be a game-changer, powering everything from Microsoft Office to developer tools.

Gerrit Smit, portfolio manager at Stonehage Fleming, said Microsoft is “becoming more of a cloud infrastructure and enterprise AI business,” noting that it’s managing to grow “very profitably and cash generatively despite the heavy AI capital expenditures.”

Meta, Nvidia, and Amazon Join the AI Rally

Meta Platforms also delivered a bullish forecast, saying AI has supercharged its advertising business, beating Wall Street expectations. It raised its annual capital expenditure outlook by $2 billion—following a similar move by Alphabet suggesting Silicon Valley’s AI arms race is heating up.

Nvidia, the bellwether of AI hardware, hit a record $4.4 trillion market cap, continuing its meteoric rise after tripling its valuation in just one year. The company hit its own $4 trillion milestone on July 9.

Amazon, too, climbed 2% ahead of its quarterly results, with investors betting that its cloud division and AI investments will show strong returns.

What’s Driving the Tech Rally

Beyond earnings, improved trade talks between the US and its global partners, just ahead of former President Donald Trump’s August 1 tariff deadline, have also lifted investor confidence. The result: renewed optimism in tech stocks and a new wave of bullishness in Wall Street’s biggest names.

Microsoft first reached $1 trillion in 2019 and took a more measured path to $3 trillion than Nvidia or Apple. But its late-2022 bet on AI via OpenAI and ChatGPT has proven pivotal more than doubling its stock price and placing it firmly at the top of the AI revolution.