Here’s Why Microsoft Corporation (MSFT) Rallied in Q2

Group 1: Market Overview - The market experienced volatility at the start of Q2 2025 due to heightened uncertainty from global tariffs, but later rebounded with a more lenient trade policy [1] - The composite returned 25.11% gross of fees and 24.85% net of fees in Q2 2025, outperforming the S&P Global 1200 Information Technology Index's return of 23.66% [1] Group 2: Microsoft Corporation Performance - Microsoft Corporation (NASDAQ:MSFT) reported a one-month return of 2.47% and a 52-week gain of 19.87%, with a stock price of $514.45 and a market capitalization of $3.824 trillion as of September 22, 2025 [2] - Microsoft’s quarterly results surprised to the upside, with shares surging over 30% during the period, driven by AI improvements and a strong partnership with OpenAI [3] - In Q4 FY 2025, Microsoft reported revenue of $76.4 billion, representing an 18% increase, or 17% when adjusted for constant currency [4] Group 3: Investment Sentiment - Microsoft is the second most popular stock among hedge funds, with 294 hedge fund portfolios holding the stock at the end of Q2 2025, up from 284 in the previous quarter [4] - Despite the positive outlook for Microsoft, there are suggestions that certain AI stocks may offer greater upside potential and carry less downside risk [4]