Could You Have Seen The Run In Microsoft Stock Coming

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Microsoft (MSFT) stock returned 36.8% from July 24 to October 22, 2026, against 3.7% for the S&P 500. This rally followed a period where the shares had lost 17.7% over the six months before July 24. By the end of this run, investors were paying a much higher price for the same twelve months of Microsoft's earnings. What had Microsoft told investors before July 24?

What Microsoft Told Investors Before July 24

Well over a year before the run, management told investors that customers were buying more. On its January 29, 2025 call, management said large companies were beginning to move from small trials to "enterprise-wide deployments", and that commercial bookings, the contracts customers sign for future sales, had increased 67%, a jump the finance chief said was driven by Azure commitments from OpenAI.

Six months later, on the July 30, 2025 call, management said Azure, its cloud platform, had passed $75 billion in annual revenue, up 34%. This expansion was more than twice the 14.9% growth Microsoft reported as a whole for fiscal 2025.

Company filings reinforced these statements. Microsoft's revenue growth from a year earlier rose from 13.3% in the quarter ended March 2025 to 18.1% in the quarter ended June 2025. Growth was still 18.3% in the quarter ended March 2026, which Microsoft filed on April 29, 2026, before the run. The evidence was public and held steady, but the shares still lost 17.7% in the six months before July 24.

How Much More Investors Now Pay For Microsoft's Earnings

At the October 22 close, investors paid 28.9 times Microsoft's earnings for the twelve months to June 2026, against 20.7 times at the end of June. The end-of-June multiple was the lowest at any quarter end since fiscal 2017.

The business maintained the pace shown in its earlier filings. In the quarter ended June 2026, Microsoft's revenue was $90.0 billion, up 17.7% from a year earlier. The shares rose 15.5% on July 30, 2026, marking the biggest one-day move of the run.

Microsoft's performance diverged notably from its mega-cap peers over this three-month span. Alphabet, Amazon and Apple stock each returned 7.9% or less over the same three months.

Is Microsoft Still Growing At The Same Pace?

On sales, yes. Microsoft's revenue grew between 16.7% and 18.4% from a year earlier in each of the four quarters to June 2026, much the same pace the filings showed before the run.

Profit on each dollar of those sales has slipped, however. Microsoft's operating margin fell in each of the last three quarters, dropping from 48.9% in the quarter ended September 2025 to 45.1% in the quarter ended June 2026. This figure remained above the 44.9% of a year earlier. Over the full twelve months, the margin was still 46.8%, against 18.5% for the S&P 500 taken as one company.

Microsoft is expected to report next on October 28, 2026, and its revenue growth from a year earlier is the number to watch.

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