Why Microsoft Stock Popped Today |

Shares of Microsoft (MSFT +0.60%) climbed on Wednesday, furthering the tech titan’s recent rally.

By the close of trading, Microsoft’s stock price was up more than 4%.

Still trading at a discount to its recent highs

Microsoft, along with many other software stocks, was down sharply from its 52-week high prior to its recent gains.

Fears that artificial intelligence (AI) would displace traditional software, along with concerns regarding the cloud computing provider’s rapidly growing capital expenditures and reliance on the unprofitable OpenAI for an uncomfortably large portion of its backlog, combined to drive Microsoft’s shares more than 30% lower.

Yet Microsoft’s share price may have already bottomed. The popular tech stock is up about 15% since its lows in late March, as many discount-focused investors bought the dip.

More gains might lie ahead

Microsoft’s rally may have more room to run. A survey of information technology executives conducted by analysts at KeyBanc showed that 85% of respondents planned to spend more on Microsoft’s lucrative Azure cloud platform. The poll also indicated that customers were increasing their usage of the tech giant’s Copilot AI assistant.

Additionally, reports surfaced on Wednesday that Microsoft took on a sizable amount of compute capacity in a Norwegian data center that was originally earmarked for OpenAI. These computing resources could help to support Azure’s growth, as the cloud platform has been capacity-constrained in recent quarters.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool has a disclosure policy.