Microsoft shares rose 13% over the past three months, a solid run that still trailed both the broader technology sector and the software group even as the company kept piling up gains in AI and cloud. Investors got another reminder of that strength in Microsoft’s fiscal third quarter for 2026, when the company reported $82.9 billion in revenue, up 18% from a year earlier.
The move has drawn fresh attention to msft stock because the company has been sending a steady stream of signals that its AI business is no longer just a future story. In May 2026, Microsoft and the EY organization announced a major expansion of their alliance and said they would commit more than $1 billion over five years to help companies scale AI and deliver enterprise-wide results. Microsoft also recently unveiled a redesigned Microsoft 365 Copilot and introduced Copilot Health into preview, steps that reinforce how deeply it is pushing AI into day-to-day corporate software.
The earnings details gave that strategy a financial backdrop. Operating income reached $38.4 billion, up 20%, while net income rose 23% to $31.8 billion on a GAAP basis and diluted earnings per share climbed to $4.27. Intelligent Cloud revenue came in at $34.7 billion, up 30%, and Azure and other cloud services grew 40%. Microsoft Cloud revenue hit $54.5 billion, a 29% increase, while commercial remaining performance obligation surged 99% to $627 billion, a sign of how much business is still locked in ahead.
That is the part of the story investors keep weighing against the stock price. Microsoft’s 13% advance lagged the 14.4% gain in the Zacks Computer - Software industry and the 24.1% rise in the Zacks Computer and Technology sector, even with AI revenue running at more than $37 billion on an annual basis and growing 123% year over year. The company is spending heavily to stay ahead, and the next question is whether that pace of investment can keep translating into margin strength as fast as it has translated into sales.
For now, Microsoft heads into another closely watched moment on June 2, 2026, when Build 2026 is scheduled. The event is likely to give customers and investors a new look at how far the company wants to push its AI tools inside the enterprise, and whether the rally in msft stock has room to catch up with the business underneath it.
