Microsoft Beats $4 Trillion Valuation: What The AI Giant’s Latest Results Mean For The Channel

Microsoft broke a $4 trillion market cap milestone Thursday after fourth-quarter 2025 results that showed sustained growth in cloud, Azure, Copilot and GenAI adoption—all important trends for channel partners.

Microsoft’s impressive fourth fiscal quarter results led to the tech giant becoming the second in history to hit a $4 trillion market capitalization and revealed some major market trends solution providers should heed.

The Redmond, Wash.-based tech giant’s market cap hit $4.01 trillion Thursday morning after the market opened, according to CNN. This comes weeks after Nvidia became the first company to achieve the milestone and a year and a half after Microsoft reached $3 trillion.

While Nvidia’s market cap remains above the milestone—coming in at $4.34 trillion Thursday—–Microsoft’s fell to $3.96 trillion shortly after passing the number. Its stock fell about 4 percent by Thursday afternoon, trading at about $534 a share. Nvidia traded at about $178 a share.

Microsoft Breaks $4 Trillion

CRN has reached out to Microsoft for comment.

Wayne Roye, CEO of New York-based Microsoft partner Troinet, told CRN in an interview that Microsoft’s artificial intelligence products, especially ones that allow users to build their own AI agents, are a huge opportunity for the channel.

“The new real estate out there is people that are creative, creating AI agents and how to leverage that in a business process to get stuff done,” Roye said.

Microsoft’s revenue in its fourth fiscal quarter ended June 30 beat Wall Street expectations by about 3 percent, according to a Thursday report by Morgan Stanley. Backlog being up 21 percent year over year says that growth is durable, while a 2 percent increase in operating margins shows that Microsoft is seeing enough revenue to justify the billions of dollars it is investing in data centers to meet AI demand, the report said.

Fourth-Quarter 2025 Channel Takeaways

Although the fourth fiscal quarter results led to an impressive valuation milestone for Microsoft, solution providers have plenty of takeaways from Wednesday’s earnings call.

For one, the AI era continues to mean big business for Microsoft’s flagship cloud offering, Azure. Azure’s 39 percent growth year over year beat expectations that were closer to the mid-30s and was a 4-percentage point acceleration quarter over quarter. Morgan Stanley estimated that Microsoft added $2.3 billion in Azure revenue quarter over quarter.

Microsoft executives did say to expect some moderation into the next quarter, forecasting 37 percent growth in Azure revenue year over year.

AI momentum could be causing businesses to move data to the cloud because accessing on-premises data for grounding inference is complex, slow and requires tools like Microsoft Fabric, Snowflake and Databricks, according to a Bernstein report.

“The results are suboptimal and metadata is not easily available,” according to the report. “Moving on-premises apps and databases to the Cloud facilitates and streamlines leveraging and building AI and this could be one of the reasons for the strong growth.”

Microsoft’s results also showed that generative AI demand helped other areas of its portfolio. Executives said the company has 100 million monthly active users for the broader Copilot AI product portfolio and more than 800 million monthly active users using AI functionality through a product that isn’t GenAI-specific, such as AI-powered summarizations in the Teams collaboration application, according to Morgan Stanley.

Investment in compute for AI should have a ripple effect on purchasing other pieces of technology, including GPUs, CPUs and networking, according to a Thursday report by Melius Research. That should prove beneficial for Nvidia, AMD and Arista Networks and, by extension, their channel partners.

The cost of AI tools continues to fall, which should help with adoption. Microsoft executives said Wednesday on the earnings call that users can process 90 percent more tokens with the same model and same GPU compared with a year ago thanks to improved underlying software. Executives have previously pointed to tenfold efficiency improvements in the model layer year on year and about threefold improvements in the GPU layer, according to Morgan Stanley.

Beyond the AI hype, Microsoft and its channel partners continued to benefit from customer migrations, with Chairman and CEO Satya Nadella calling out SAP, VMware and even Microsoft server workloads on Wednesday’s call. Microsoft’s data management offering, Fabric, saw revenue grow 55 percent year on year. And the Dynamics 365 portfolio of business applications accelerated in growth, going from 16 percent growth year over year in the third fiscal quarter to 21 percent growth in the most recent quarter.

The numbers also suggested a healthy amount of license upselling, an activity sometimes handled by solution providers. Microsoft 365 seat growth decelerated to 6 percent growth year over year from 7 percent the prior quarter while M365 Commercial Cloud still grew 16 percent year over year in revenue, with the higher-priced E5 a “primary driver” of average revenue per user, according to Morgan Stanley.

Microsoft’s security business also appears to be on an upswing, with executives revealing the company has about 1.5 million security customers now.

As at least one investment firm picked up on, Microsoft CFO Amy Hood did not offer any details on whether the tech giant has made improvements in its channel partner business.

Should Microsoft make the right investments in its channel partner program—the vendor revealed a heap of funds related to partner work in AI, security and elsewhere in its portfolio in the early days of its 2026 fiscal year—improved channel business “could represent a source of potential upside going forward,” Bank of America said in a report Wednesday.