MSFT Stock Surges 8.4% With A 5-day Winning Spree On Strong Earnings Beat
Microsoft (MSFT) – a developer of software, services, and productivity business solutions – hit 5-day winning streak, with cumulative gains over this period amounting to a 8.4%. The company market cap has surged by about $279 Bil over the last 5 days, and currently stands at $3.6 Tril.
The stock has YTD (year-to-date) return of 0.4% compared to 1.9% for S&P 500. This calls for a re-evaluation of the stock’s valuation to find out whether this is an opportunity, or a trap.
What Triggered The Rally?
[1] Q2 2026 Earnings Report
- Microsoft Stock To $387?
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- Microsoft’s $250 Billion Problem Has a Name: OpenAI
- A Decade of Rewards: $368 Bil From Microsoft Stock
- Microsoft Stock: Is the AI Investment Skepticism Justified?
- Triggers That Could Ignite the Next Rally In Microsoft Stock
- EPS of $4.14, beating estimates of $4.05
- Revenue of $81.3 billion, a 17% increase year-over-year
- Impact: Positive investor sentiment, Stock price increase
[2] Analyst Upgrades and Positive Ratings
- Goldman Sachs upgrade to “strong-buy”
- Multiple “Buy” and “Outperform” ratings from analysts
- Impact: Increased investor confidence, Pre-earnings rally
Opportunity or Trap?
Below is our take on valuation.
There is not much to fear in MSFT stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive (For details, see Buy or Sell MSFT).
But here is the real interesting point.
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Returns vs S&P 500
The following table summarizes the return for MSFT stock vs. the S&P 500 index over different periods, including the current streak:
| Return Period | MSFT | S&P 500 |
|---|---|---|
| 1D | 0.2% | -0.0% |
| 5D (Current Streak) | 8.4% | 1.5% |
| 1M (21D) | -1.2% | 0.7% |
| 3M (63D) | -9.2% | 1.5% |
| YTD 2026 | -0.4% | 1.9% |
| 2025 | 15.6% | 16.4% |
| 2024 | 12.9% | 23.3% |
| 2023 | 58.2% | 24.2% |
Gains and Losses Streaks: S&P 500 Constituents
There are currently 55 S&P constituents with 3 days or more of consecutive gains and 80 constituents with 3 days or more of consecutive losses.
| Consecutive Days | # of Gainers | # of Losers |
|---|---|---|
| 3D | 36 | 38 |
| 4D | 7 | 24 |
| 5D | 4 | 15 |
| 6D | 6 | 0 |
| 7D or more | 2 | 3 |
| Total >=3 D | 55 | 80 |
Key Financials for Microsoft (MSFT)
Last 2 Fiscal Years:
| Metric | FY2024 | FY2025 |
|---|---|---|
| Revenues | $245.1 Bil | $281.7 Bil |
| Operating Income | $109.4 Bil | $128.5 Bil |
| Net Income | $88.1 Bil | $101.8 Bil |
Last 2 Fiscal Quarters:
| Metric | 2026 FQ1 | 2026 FQ2 |
|---|---|---|
| Revenues | $77.7 Bil | $81.3 Bil |
| Operating Income | $38.0 Bil | $38.3 Bil |
| Net Income | $27.7 Bil | $38.5 Bil |
While MSFT stock looks attractive given its winning streak, investing in a single stock without detailed, thorough analysis can be risky. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.