From Layoffs to Liftoff: Microsoft Set to Join Nvidia in $4 Trillion Club

Microsoft is poised to become the next member of the exclusive $4 trillion market cap club, following a blockbuster earnings report that sent its stock soaring in after-hours trading on Wednesday. The surge puts the tech giant on par with Nvidia, which crossed the milestone earlier this month, and ahead of Apple, whose market cap has stumbled amid slowing AI momentum.

📈 Microsoft’s Fastest Growth in Three Years

The company’s Azure cloud computing division was the star performer, fueling an 18% jump in revenue. For the first time, Microsoft’s cloud services sales surpassed $75 billion in FY25, a 34% increase year-on-year.

Shares climbed more than 8% in extended trading, pushing Microsoft’s valuation to the verge of $4 trillion. The stock has already risen 22% in 2025, outperforming the S&P 500’s 8% increase. On July 25, Microsoft closed at a record $513.71, and has since surged past $553 after-hours.

🏆 Overtaking Apple, Closing in on Nvidia

The rally places Microsoft ahead of Apple, whose shares are down 17% this year due to lackluster innovation in AI. Industry analysts say Microsoft’s aggressive AI push, coupled with strong Azure demand, has helped it leapfrog Apple in market cap rankings.

🤖 AI Arms Race Intensifies

The AI-driven rally wasn’t limited to Microsoft. Meta also enjoyed an 11% boost in after-hours trading, after raising its annual capital expenditure forecast by $2 billion to as much as $72 billion. CEO Mark Zuckerberg credited AI advancements for strengthening Meta’s ad business across Facebook and Instagram. Analysts expect the company to spend $120 billion on AI this fiscal year, signaling fierce competition with Microsoft and Alphabet’s Google.

⚠️ Layoffs Amid Record Profits

Microsoft’s rise comes against the backdrop of 9,000 job cuts earlier this year, a move CEO Satya Nadella described as a “tough decision” to prioritize AI investments and streamline costs. While the layoffs drew criticism, Nadella defended the strategy, citing the firm’s resilience and long-term growth outlook.

The trend is not unique to Microsoft. Intel, TCS, and Amazon have also announced major layoffs in 2025, underscoring the tech industry’s turbulent shift toward AI-powered operations.