The S&P 500 is up by more than 10% this year, and its growth has outpaced Microsoft (NASDAQ: MSFT), but I don’t think that trend will last too much longer.
Microsoft’s 20% return over the past month shows that more investors are spotting the opportunity
Its earnings results were the major catalyst behind the surge, and there were a few details in the report that make me think Microsoft is a more promising investment now than the broad-market S&P 500. Cloud computing revenue continues to grow Most of Microsoft’s growth is coming from its cloud computing unit. Revenues from that part of the business were up by 27% year over year in Microsoft’s fiscal 2026 fourth quarter.
This segment has maintained high growth rates for many quarters, and I believe that trend will continue. Artificial intelligence (AI) has boosted enterprise demand for cloud platforms. Competitors like Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) have reported strong demand for their cloud platforms that continues to accelerate.