Microsoft Achieves Strongest Three-Day Surge in 26 Years! Recovers All YTD Losses as AI Strategy Begins to Bear Fruit

Microsoft (MSFT-US) shares climbed 4.9% on Monday (3rd), marking a cumulative gain of 24.9% over the past three trading sessions—the strongest three-day performance since October 2000—and fully recouping all losses from earlier this year, signaling a clear decline in market concerns over its artificial intelligence (AI) investments.

Microsoft has risen approximately 0.8% year-to-date in 2026. According to Dow Jones market data, Microsoft previously achieved a remarkable three-day gain of 29.24% in October 2000.

Last week, Microsoft reported its earnings, revealing that revenue growth for its Azure cloud business accelerated. CEO Satya Nadella stated that the AI assistant Copilot now has over 30 million paid subscribers, with new paid users more than doubling compared to the previous quarter.

Rhind, CEO of GraniteShares, said these figures have convinced investors that Microsoft’s massive capital expenditures on AI in recent years are finally generating returns. "This rally has the potential to continue because Microsoft has finally answered the question the market has been asking for the past 18 months: Will massive AI capital spending yield sufficient returns?"

He added that Monday’s continued price increase was not merely an extension of post-earnings momentum, but rather reflected the market’s reassessment of Microsoft’s AI development progress and willingness to assign it a higher valuation.

Rahbari, Portfolio Manager at Rational Equity Armor Fund, noted that as major hyperscale cloud providers race to invest in AI, corporate capital expenditure has entered "uncharted territory." However, companies’ continued willingness to expand investment indicates they see demand robust enough to justify returns.

Microsoft also assured investors during its earnings call that it expects to maintain positive free cash flow in the new fiscal year, confirming it will not turn negative due to AI investments.

Despite rising AI investment levels, Microsoft and other hyperscalers widely acknowledge that current infrastructure supply still cannot fully meet market demand, underscoring that enterprise AI deployment needs remain strong.