From Layoffs to Liftoff: Microsoft Nears $4 Trillion, Eyes Nvidia’s Market Cap

Microsoft is on the brink of joining the exclusive $4 trillion market cap club, following a strong earnings report that exceeded Wall Street expectations. In extended trading on Wednesday, the company’s shares surged by 8%, bringing it closer to chipmaker Nvidia, which reached the $4 trillion milestone earlier this month.

This rapid growth represents Microsoft’s fastest expansion in over three years, largely fueled by its booming cloud computing business, Azure.

Azure Drives Unprecedented Revenue Growth

One of the primary drivers behind Microsoft’s surge is its Azure cloud division. In fiscal year 2025, sales from Azure and other cloud services surpassed $75 billion for the first time — a 34% increase compared to the previous year. This 18% overall revenue jump has solidified Microsoft’s position as a dominant force in enterprise cloud services, competing fiercely with Amazon Web Services and Google Cloud.

Stock Rally Boosts Microsoft Ahead of Apple

By market close on Wednesday, Microsoft’s stock had already climbed 22% in 2025, far outpacing the S&P 500’s 8% rise. On July 25, the tech giant hit a record-high closing price of $513.71, and after-hours trading pushed the stock beyond $553. This surge has positioned Microsoft ahead of Apple on the market capitalization leaderboard, making it the second-most valuable company after Nvidia.

While Microsoft and Nvidia are gaining momentum thanks to AI innovation, Apple has lagged behind. The iPhone maker has seen its shares dip 17% this year due to a lack of major advancements in artificial intelligence.

Meta and Other AI Titans Join the Rally

Microsoft isn't the only tech giant seeing gains. Meta, the parent company of Facebook and Instagram, saw its shares jump 11% in the same late trading session. The rally has bolstered investor confidence and reaffirmed the tech sector’s aggressive push into AI development.

Meta increased its annual capital expenditure forecast by $2 billion, now estimating it will spend between $66 billion and $72 billion. CEO Mark Zuckerberg cited AI advancements as key to improving the company’s core ad business, with experts projecting Meta’s total AI spend to hit $120 billion by fiscal year-end.

Layoffs Shadow Microsoft's Success

Despite its booming financials, Microsoft has faced internal challenges — notably mass layoffs. Earlier this year, the company cut over 9,000 jobs across multiple departments and roles. CEO Satya Nadella attributed the job cuts to realigning priorities and maximizing investment in artificial intelligence.

In a company-wide memo, Nadella addressed criticism regarding increased H-1B visa applications and clarified that the overall headcount had not significantly changed. He called the layoffs a "tough decision" and highlighted the company's resilience during a transformative period.

Microsoft is not alone in its workforce reductions. Other tech majors like Intel, TCS, and Amazon have also announced layoffs in 2025, signaling a broader trend of restructuring amid heavy AI investments and cost-cutting measures.

Conclusion: Microsoft’s Bold Bet on AI Pays Off

As Microsoft nears the $4 trillion mark, it becomes clear that its strategic focus on AI and cloud computing is delivering massive returns. While the journey included tough decisions like layoffs, the company’s ability to outpace competitors and lead innovation in the AI space positions it as a dominant player for years to come.

With Azure's momentum, rising stock prices, and continued AI investments, Microsoft is redefining tech leadership — not just chasing milestones, but setting them.