Microsoft just laid the market blueprint for other AI giants — and its stock is on pace for its biggest jump in 18 years

It’s hard to imagine Microsoft turning in a better earnings report.

Not only did the tech giant post strong growth in its AI-powered Azure cloud-computing business, it also refrained from raising its capex-spending forecast.

Investors went nuts over the report, pushing Microsoft shares up as much as 16%. The stock is currently on pace for its biggest single-day jump since 2008.

Microsoft’s market success did well to lay out a blueprint for hyperscalers hoping to get investors excited again: Show that you’re starting to monetize AI, and don’t revise your spending projections upward. If you do that, investors will reward you.

It also reinvigorated a market that sold off sharp on Wednesday following Fed Chair Kevin Warsh’s post-FOMC address. Here’s a rundown of the gains across the market:

• S&P 500: 7,379.32, up 0.9%
• Dow Jones Industrial Average: 51,723.72, up 0.3%
• Nasdaq 100: 27,905.26, up 2.6%

The chipmaking sector — which has been the foremost lightning rod for AI-spending jitters — got a particularly big boost. The Philadelphia Semiconductor Index soared 8%, while Micron, Intel, and AMD each spiked double digits.

Microsoft’s market-moving earnings report contrasted sharply with that of its fellow hyperscaler Meta.

Meta issued a disappointing sales forecast while simultaneously raising capex projections telling investors that the lower end of its capex projections for 2026. Its stock fell 8%.

Meta-specific concerns aside, Microsoft may have just shown the market that there’s a fine line hyperscalers can walk in their spending strategy, one that allows them to both remain competitive and project at least some image of capital discipline.

Jeff Fratarcangeli, the managing principal of Fratarcangeli Wealth Management, told Business Insider earlier this week that it’s a line he hopes to see more companies walk in the future. While he doesn’t think it’s prudent for companies to pull back on capex, he said firms can acknowledge investors’ concerns.

“I kind of want to see them play both sides of that,” Fratarcangeli said.

“They can say things in a fashion that doesn’t necessarily irritate the investors,” he continued, “yet still say they’re going to be competitive.”