Jim Cramer on Microsoft and Other Stocks

6. Microsoft Corporation (NASDAQ:MSFT)

Cramer pointed out how software stocks such as Microsoft Corporation (NASDAQ:MSFT) took off on Tuesday.

“As is always the case, there are pockets of positivity that seem immune to the tug of the bond market, at least for most of the session. After showing immense love for the semiconductors, disdain for the software companies, for most of the year, the game is reversed. The Adobes and ServiceNows and Microsofts soared today. Doesn’t make a lot of sense and… we’re getting worrisome parabolic moves in many of these stocks.”

Microsoft (NASDAQ:MSFT) is a prominent technology company known for developing and supporting a wide range of software, services, devices, and solutions. The company has positioned itself well to capitalize on the rapidly growing demand for generative AI software, an area that Bloomberg Intelligence forecasts will see a massive increase in spending. By 2032, generative AI software spending is expected to rise by 2,790%, approaching $320 billion and growing at an annual rate of 52%.

The company has been tapping into this opportunity by focusing on generative AI copilots, which have shown promising early results. During the first quarter fiscal 2025 earnings call, CEO Satya Nadella highlighted that the company’s AI business is on track to surpass an annual revenue run rate of $10 billion in the next quarter, making it the fastest-growing business in the company’s history to achieve this milestone.

Microsoft’s (NASDAQ:MSFT) Nadella also pointed out that the use of Azure OpenAI has more than doubled in the past six months, reflecting the increasing adoption of AI-driven solutions. Additionally, AI has played a significant role in driving growth in the company’s cloud services, contributing approximately one-third of the cloud services sales growth in the most recent quarter.