Microsoft has joined Nvidia as the second company to surpass a $4 trillion market valuation, cementing its place at the top of the global tech hierarchy.
The achievement, fueled by booming demand in cloud computing and artificial intelligence (AI), comes as the company confirmed plans to lay off 9,000 employees, 4% of its workforce, in its largest staff reduction since 2023.
AI Investments Drive Historic Growth
The valuation milestone was reached Thursday after Microsoft’s shares climbed as much as 8% in early trading before settling 4.5% higher.
The surge followed a blockbuster earnings report highlighting the company’s accelerating AI strategy. Microsoft’s investments in OpenAI and the integration of AI-powered Copilot tools across its Office suite and Azure cloud services have proven transformative.
Copilot now counts more than 100 million monthly active users. Azure, meanwhile, generated $75 billion in revenue over the past year.
“AI is no longer a future bet, it’s today’s growth engine,” said Gerrit Smit, lead portfolio manager at Stonehage Fleming.
Reshaping the Global Tech Landscape
Since the launch of ChatGPT in November 2022, Microsoft’s stock price has more than doubled. The company now stands alongside Nvidia, which hit a $4.4 trillion valuation in July 2025 after tripling in value within a year.
Apple trails with a market cap of about $3.12 trillion, while Amazon, Alphabet, and Meta Platforms round out the group of AI-driven giants. Together, these firms now account for a quarter of the S&P 500, according to data from LSEG.
The broader market reflected the momentum: the S&P 500 technology index rose 1.2%, the communication services index jumped 3%, and the Nasdaq Composite climbed 1.16% to a record 21,374.76.
Record Spending Meets Workforce Cuts
To keep pace with demand, Microsoft is forecasting a record $30 billion in capital expenditures for the current fiscal quarter, underscoring its ambition to dominate both AI and cloud infrastructure.
Yet the company confirmed it would cut about 9,000 jobs, following a 6,000-job reduction earlier in May.
Analysts say the layoffs reflect Microsoft’s push to streamline operations even as it expands aggressively.
“It is in the process of becoming more of a cloud infrastructure business and a leader in enterprise AI, doing so very profitably,” Smit added.
Big Tech’s Expanding Power
The milestone highlights not only Microsoft’s strength but also the wider influence of Big Tech in the global economy.
Nvidia continues to dominate AI hardware with record-breaking valuations, while Microsoft’s integration of AI into everyday software positions it as a central player in the digital transformation era.
For investors, the developments illustrate how AI has shifted from an emerging technology to a core economic driver.
Looking Ahead, the Big Picture
As Microsoft pushes deeper into AI and cloud services, its massive infrastructure spending suggests it is preparing for a new era of technological growth.
Despite global uncertainties, including shifting U.S. tariff policies, the company remains positioned to shape the trajectory of enterprise technology worldwide, securing its place among the most valuable and influential corporations in history.
Talking Points
Microsoft’s $4 trillion milestone highlights both the power and paradox of artificial intelligence. Its valuation surge, fueled by AI-driven tools like Copilot with over 100 million active users, shows how AI can unlock immense productivity and market value.
Yet, the decision to cut 9,000 jobs despite record profits reflects how AI reshapes, rather than directly replaces, work, demanding new skills while making some traditional roles redundant.
As experts note, “AI isn’t going to take over anybody’s jobs, but AI professionals will,” a reality evident in Microsoft’s $30 billion push into AI and cloud infrastructure.
The layoffs are less about financial strain and more about restructuring for efficiency, ensuring resources are channeled into sustaining its AI dominance.
In essence, Microsoft’s achievement celebrates AI’s economic impact while signaling a labor market shift where adaptability and AI expertise determine who thrives.
