Microsoft Increases by 4%, Stays Strong Despite NASDAQ Decline

May 15, 2026

Quick Read

Microsoft (MSFT) shares saw a 4% increase today, reaching $424.65, even as the Nasdaq 100 experienced a 1% decline. This surge can be attributed to the company’s AI division, which generated $82.89 billion in revenue for Q3—an 18% rise compared to last year—and a 40% growth in Azure services, bringing an annual revenue run rate of $37 billion, a staggering 123% increase year-over-year.
As investors take profits from the semiconductor and crypto sectors that had surged in 2026, Microsoft seems to be shifting from being a cash cow to a player benefiting from the AI boom.
Interestingly, analysts who initially predicted NVIDIA’s success in 2010 have recently listed their top 10 stocks, and Microsoft was notably omitted.

On Friday, Microsoft (NASDAQ:MSFT) experienced a midday trading boost, rising 4% to approximately $424.65, while the broader Nasdaq showed decreasing trends. This increase is particularly notable since most other high-beta tech stocks were dipping during the session.

The Nasdaq 100 index faced a 1% drop intraday, primarily affecting the stocks that had fueled the 2026 rally. Microsoft stands out as one of the very few high-performing technology stocks in this context.

This situation indicates a larger narrative. Leading up to Friday, MSFT stock was down 15% year-to-date, marking it as one of the weakest performers among major tech companies, while the Nasdaq 100 managed to increase by 17%. Today’s price action seems indicative of a classic shift toward undervalued stocks.

Analysts who recognized NVIDIA’s potential in the past have now set their sights on new top stocks, without including Microsoft.

Rotation of Chips and Cryptocurrencies

The market pullback on Friday heavily impacted stocks that drove the 2026 rally. For example, NVIDIA (NASDAQ:NVDA) shares dipped 3%, despite having seen a 69% annual increase. Predictions from Polymarket indicated a 98% likelihood of a decline for NVIDIA prior to the trading session.

Intel (NASDAQ:INTC) stocks dropped by 7% after a remarkable rally that had seen this stock rise 193% year-to-date, marking it as a likely target for profit-taking following recent successes in AI.

Advanced Micro Devices (NASDAQ:AMD) also faced a 4% decline after nearly doubling in value this past year. The overall downturn among semiconductor stocks appears widespread, hinting at profit-taking rather than deeper issues.

The pressure in the market extends beyond semiconductors. Coinbase (NASDAQ:COIN) stocks fell by 8%, placing cryptocurrencies firmly in the risk-off category on this day. It seems that Microsoft’s more stable positioning is yielding positive results.

The relative strength of struggling stocks often attracts technical buyers, making these rotational shifts significant. Microsoft has previously served as a reliable source of profits for enthusiastic AI strategies; this movement might indicate the start of a broader market rebalancing after an explosive rally in chip and crypto-related stocks.

The Azure and AI Story Behind Bidding

Microsoft is entering this trading session underpinned by solid fundamentals. According to the company’s Q3 2026 report released on April 29, revenues reached $82.89 billion, an 18% year-over-year increase. Earnings per share (EPS) hit $4.27, surpassing expectations by 5%.

The intelligent cloud revenue climbed to $34.68 billion, with Azure seeing a robust 40% growth. CEO Satya Nadella emphasized, “The annual revenue run rate for our AI business surpassed $37 billion, marking a 123% increase year over year.”

Microsoft’s future commercial obligations stand at $627 billion, nearly double its previous numbers, showing strong visibility into sustained cloud demand. The company’s stock remains more reasonably priced compared to many of its large-cap peers, with a forward price-to-earnings ratio of 21 and an analyst consensus target of $561.56.

Moreover, Microsoft’s capital expenditures totaled $30.88 billion for the last quarter—an 84% increase year over year. This indicates a significant investment in infrastructure, supporting Azure’s growth. Despite the stock’s stagnation over the months, the underlying business continues to expand.

It’s challenging to understand why Microsoft’s stock has dropped 12% this year when its fundamentals seem to support growth. This disparity might be attracting buyers today, highlighting that only the stock price reflects change, not the compelling Azure and Copilot story.

Things to See Up Close

Prediction markets show a bullish outlook for Microsoft, with Polymarket suggesting a 98% chance of a positive closing price today, likely settling in the $420 to $430 range.

Retail investor sentiment appears optimistic, with Reddit discussions revealing a bullish score of 68 for Microsoft this morning. Conversations are largely defending the AI narrative amid concerns about a potential bubble. Sentiment scores have remained consistent between 62 and 77, implying that the rally has genuine backing.

For savvy investors, today’s market might not prompt immediate buy or sell decisions but offers a valuable indicator of where shifts are occurring with investment. A single day of relative strength shouldn’t be mistaken for a confirmed market trend, especially as Microsoft still shows significant declines year-to-date despite the current rise.

Keep an eye on Microsoft until the close of trading. It will be telling to see if the stock can hold on to its 4% gains while the Nasdaq remains in the red. This could indicate whether today’s movement signals a real sector shift or just a temporary bounce back for large companies that have lagged this year.