Microsoft Surges Toward $4 Trillion Market Cap on Blowout Earnings and Cloud Growth

Microsoft (MSFT) is on the brink of making history again. Following a blockbuster fourth-quarter earnings report, the tech titan is poised to become the second U.S. company to reach a $4 trillion market capitalization—joining Nvidia in the exclusive club.

🔹 Q4 Earnings Crush Estimates

For its fiscal Q4, Microsoft reported:

• Adjusted EPS: $3.65 vs. $3.37 expected

• Revenue: $76.4 billion vs. $73.9 billion expected

• Cloud Revenue: $46.7 billion, up 27% YoY

The beat was largely fueled by Microsoft Azure, which posted a 39% year-over-year revenue increase, outpacing analysts’ expectations of 35% and accelerating from the prior quarter’s 33% growth. For the full year, Azure revenue climbed to $75 billion, up 34% from 2024—solidifying Microsoft’s role as a global cloud leader.

🔹 The AI and Cloud Engine

Investor enthusiasm is being driven by two powerful engines: cloud computing and AI infrastructure. Azure’s performance, which is closely tracked as a bellwether of Microsoft’s enterprise strategy, underscores rising enterprise demand for cloud services amid the AI arms race.

The strong report follows a similarly impressive showing from Google Cloud, highlighting a broader trend in hyperscaler momentum.

🔹 Big Spending, Bigger Returns

Microsoft’s capital expenditures soared to $24 billion in Q4, well ahead of the $21.4 billion estimate. The company is pouring resources into building the infrastructure needed to support AI applications and large-scale cloud deployments.

While this figure will grow in the near term—$30 billion in capex is projected for Q1 2026—CFO Amy Hood assured investors that spending growth will moderate compared to fiscal 2025. Still, the company anticipates double-digit revenue and operating income growth in fiscal 2026.

🔹 Market Reaction and Milestone Watch

Shares surged 8.5% in after-hours trading, climbing to $556.60—well above the $538.13 threshold for Microsoft to hit a $4 trillion valuation. If gains hold through the next trading session, the software and cloud giant will become the second company ever to reach that valuation, trailing only Nvidia.

Year to date, Microsoft stock is up 22%, reflecting consistent investor confidence in its strategic pivot toward AI-powered services and cloud-first enterprise solutions.

🔍 Key Takeaway

Microsoft Azure revenue growth is once again proving to be the cornerstone of Microsoft’s market dominance. With record-setting capex, accelerating cloud adoption, and bullish guidance for 2026, Microsoft’s momentum seems unstoppable.

📈 As James Ambrose, director of Microsoft Investor Relations, put it:
“We closed out our fiscal year 2025 with a strong quarter that significantly exceeded expectations, driven by continued strong demand for our cloud and AI services.”

High-Risk Crypto Lending Returns:
New Players Bet on Unsecured Digital Loans

A new wave of high-risk crypto lending ventures is emerging, fueled by rising investor confidence and renewed interest in digital assets. Just three years after the collapse of major crypto lenders during the 2022 market crash, companies like Divine Research and 3Jane are experimenting with uncollateralized loans, betting that blockchain and artificial intelligence will reshape microfinance.

Divine Research and the Microfinance Revolution

San Francisco-based Divine Research has already issued roughly 30,000 short-term, unsecured loans since December, partnering with Sam Altman’s iris-scanning crypto group, World, to identify borrowers.

“We’re loaning to average folks like high-school teachers, fruit vendors—anyone with internet access,” said Diego Estevez, Divine’s founder. “This is microfinance on steroids.”

Divine offers loans of less than $1,000 worth of Circle’s USDC stablecoin, mainly to cash-strapped overseas borrowers underserved by traditional banks. Borrowers are screened using Altman’s biometric system, which prevents defaulters from creating new accounts. Interest rates range from 20% to 30%, with default rates on initial loans averaging around 40%.

High yields on the platform are attracting individual depositors, with Estevez claiming the system is designed so that liquidity providers “always make a profit” despite defaults. This approach reflects the growing appetite for high-risk crypto lending strategies.

3Jane’s AI-Powered Lending Model

Crypto startup 3Jane is also pushing the boundaries by offering uncollateralized USDC credit lines on the Ethereum blockchain. The company recently secured $5.2 million in seed funding from Paradigm, a venture group that previously invested in FTX.

3Jane requires “verifiable proofs” of crypto, bank assets, or cash flow, but no actual collateral. Defaulted loans are sold to U.S. collections agencies. The company is developing AI-driven lending platforms where “programmatically bound” AI agents would follow debt covenants, allowing for lower interest rates.

Wildcat, Clearpool, and the Next Phase of Lending

Other protocols like Wildcat are targeting professional market makers and crypto trading firms with customizable credit facilities. Wildcat has facilitated approximately $170 million in loans to date, enabling borrowers to negotiate terms such as interest rates and maturity dates.

“In the event of a default, lenders coordinate directly among themselves to seek recourse,” said Evgeny Gaevoy, Wildcat adviser and CEO of crypto market maker Wintermute.

This shift signals a maturing landscape for high-risk crypto lending, even as regulatory scrutiny and market volatility persist.

Lessons from the 2022 Crash

The return of unsecured lending comes with significant cautionary tales. In 2022, the crypto market crash triggered defaults and bankruptcies at firms like Celsius and Genesis. Celsius CEO Alex Mashinsky was later sentenced to 12 years for fraud, while Genesis settled a $2 billion lawsuit with New York’s attorney general.

Despite these setbacks, major players like Coinbase, Tether, and Galaxy continue to dominate the crypto lending market, while Wall Street firms—including JPMorgan and Cantor Fitzgerald—are beginning to extend collateralized loans against cryptocurrency holdings.

The Road Ahead

With bitcoin trading near record highs and institutional interest returning, the high-risk crypto lending sector is poised for both growth and controversy. As AI-driven tools and blockchain protocols evolve, lenders are betting that this time will be different—but the risks remain as high as the rewards.

The Smart Earnings Season Strategy Traders Are Using Now

Earnings season is in full swing, and with it comes the potential for both significant gains and painful losses. For traders and investors, understanding the starting point of a stock’s price action is a critical part of any earnings season strategy.

Why a Beat Isn’t Always a Beat

A common misconception during earnings season is that strong earnings automatically translate to higher stock prices. This past Thursday told a different story: American Airlines Group dropped 9.6%, IBM fell 7.7%, and Honeywell International declined 6.2%—despite all three reporting earnings that topped expectations. The issue? Each of these stocks had already posted double-digit gains over the past three months.

On the other hand, Raymond James Financial climbed 3.7% and CenterPoint Energy rose 1.9% despite reporting profits that fell short of estimates. This contrast highlights the importance of evaluating a stock’s position heading into earnings.

Oversold vs. Overbought: The Key to Post-Earnings Moves

Katie Stockton, founder of Fairlead Strategies, emphasizes that stocks that are oversold going into earnings often have a lower bar to clear. “We like stocks that are relatively oversold coming into earnings,” says Stockton. “They theoretically have a lower bar set in price terms as investors absorb the earnings data.”

Oversold is a technical term that refers to stocks that have declined sharply, often due to negative sentiment or prior bad news. As a result, much of the negativity may already be priced in—making it easier for these stocks to rebound if earnings are merely “less bad” than feared.

Stocks to Watch: The Oversold List

According to Fairlead’s analysis, six stocks stand out as potential candidates for a positive earnings reaction:

• American Tower REIT (AMT)

• Visa (V)

• Procter & Gamble (PG)

• Merck (MRK)

• Mondelez International (MDLZ)

• CVS Health (CVS)

These stocks have gained just 3% on average since the April lows, lagging the S&P 500 by roughly 22 percentage points. With an average Buy rating ratio of 72% (compared to 55% for the broader S&P 500), they are also fundamentally supported by analysts.

The Overbought Challenge

In contrast, stocks that are overbought heading into earnings face a much higher bar to continue climbing. Fairlead’s “overbought” list includes:

• Amazon (AMZN)

• Meta Platforms (META)

• Microsoft (MSFT)

• Boeing (BA)

• Royal Caribbean Group (RCL)

• Seagate Technology (STX)

These names have soared an average of 66% since the April lows. While Wall Street remains bullish—Meta, Microsoft, and Amazon have Buy ratings near 90%—it will take stellar earnings reports to push these stocks significantly higher.

Lessons for Investors

The key takeaway for any earnings season strategy is that price momentum going into a report often matters more than the earnings numbers themselves. Overextended stocks may face profit-taking even after solid results, while oversold names can surprise to the upside if expectations are already low.

Elon Musk Predicts $30 Trillion Tesla Humanoid Robot Revenue

Tesla CEO Elon Musk unveiled ambitious plans for the company’s future, highlighting the potential of Tesla humanoid robot revenue during a virtual appearance at the Tesla Owners of Silicon Valley 2025 “Takeover” event in San Mateo, California. This annual gathering, which attracts Tesla and Musk enthusiasts from around the globe, served as a platform for Musk to share his bold outlook on artificial intelligence, robotics, and the next phase of Tesla’s growth.

A $30 Trillion Vision

Musk made headlines by suggesting that Tesla’s humanoid robot division could hypothetically generate $30 trillion a year in revenue. Tesla is leveraging its artificial intelligence expertise and advanced manufacturing capabilities to develop its Optimus humanoid robots. Musk described the third-generation Optimus design as the right platform for mass production, with plans to produce a few hundred units by the end of 2025. Although this figure is lower than earlier expectations of a few thousand units, Musk indicated that the redesign would enable faster scaling beginning in 2026.

According to Musk, the global market for humanoid robots could be massive. “There’s a market for 20 billion robots,” he said. “Hypothetically, if Tesla was making one billion of these a year… maybe on the order of $30,000, I’m just guessing here, that’s $30 trillion in revenue.” While this is still an aspirational scenario, it underscores Tesla’s bet on robotics as a transformative industry.

AI and Robotics: Tesla’s Next Frontier

Tesla is investing heavily in artificial intelligence, both for its autonomous vehicle systems and its humanoid robots. Musk believes robots could become “the world’s biggest product,” surpassing traditional industries like housing, consumer electronics, and automotive manufacturing. Nvidia CEO Jensen Huang has similarly predicted that robots could eventually become the largest global market, echoing Musk’s optimism.

Market analysts also see the potential disruption. Shay Boloor, chief market strategist at Futurum, noted that the world currently spends about $50 trillion on human labor annually, suggesting that useful humanoid robots could radically reshape the labor market. Musk envisions a future where AI and robotics usher in an “age of abundance,” effectively eliminating hard labor.

Retail Investor Spotlight on Tesla

Events like the Silicon Valley “Takeover” have become important forums for retail investors, who own over 40% of Tesla’s publicly traded shares—far higher than the 25% average ownership seen in other “Magnificent Seven” stocks such as Apple, Amazon, and Microsoft.

Tesla’s stock has experienced significant volatility in recent weeks. Shares fell 8% after the company’s second-quarter earnings report but recovered 4% on Friday. Despite being down 22% year-to-date, Tesla stock has gained approximately 44% over the past 12 months. With a price-to-earnings ratio of roughly 180 based on 2025 estimates—second only to Palantir Technologies in the S&P 500—investors are clearly factoring in significant future growth, possibly tied to Musk’s Tesla humanoid robot revenue vision.

The Road Ahead

While Musk’s prediction of $30 trillion in annual humanoid robot revenue remains distant and highly speculative, Tesla’s investments in AI and robotics highlight a strategic pivot that could define its long-term future. For now, these projections serve as both inspiration and a reminder of the bold thinking that has propelled Tesla into the spotlight.

White House Intensifies Pressure on Fed for Dramatically Lower Interest Rates

The White House pressure on Fed Chair Jay Powell intensified on Sunday as senior officials demanded “dramatically lower” interest rates ahead of the Federal Open Market Committee’s (FOMC) key meeting this week. With rates currently at 4.25–4.5 percent, the Trump administration is pushing for an aggressive cut to 1 percent, claiming that high borrowing costs are stifling economic growth.

White House Criticism of Powell

Russell Vought, director of the White House Office of Management and Budget, criticized Powell for being “too late” in cutting rates, while also blasting the Federal Reserve’s $2.5 billion headquarters refurbishment as a “largesse monstrosity.”

“We believe, on a host of fronts, Chairman Powell has been too late,” Vought told CNN. “The president is putting his viewpoints out there with regard to what interest rates should be, which is dramatically lower than where they are.”

Vought’s comments underscore the growing White House pressure on Fed policymakers to act swiftly, even as inflation data remains mixed.

Trump’s Campaign for Lower Borrowing Costs

President Donald Trump has made it clear that he wants interest rates cut to 1 percent. His campaign against Powell has included threats to fire him and highly public criticism of the Fed’s policy stance. Trump even took the unusual step of personally visiting the Fed’s headquarters last week, inspecting its ongoing $2.5 billion refurbishment.

On Friday, Trump hinted that Powell had signaled support for lower rates, saying he had a “very good meeting” with the Fed chair. “The U.S. economy is doing really well,” Trump said, adding that Powell would likely “recommend lower rates” to the rest of the FOMC.

Commerce Secretary Joins the Chorus

U.S. Commerce Secretary Howard Lutnick echoed the call for rate cuts, arguing that current policy does not reflect America’s economic momentum. “The president’s bringing in hundreds of billions of dollars, reducing our deficit. How can that not be the underpinning for us having less debt and lowering rates?” Lutnick told Fox News.

Divisions Within the Fed

The White House pressure on Fed officials comes at a time of growing division among policymakers. Some FOMC governors, including Chris Waller and Michelle Bowman—both Trump appointees—have signaled support for a 25-basis-point cut as soon as Wednesday.

Waller, in particular, has suggested that tariffs imposed by the Trump administration are a “one-off shock” that won’t drive long-term inflation. He also expressed concerns that labor market data is weaker than headline numbers suggest.

Rates on Hold for Now?

Despite the mounting pressure, the Fed is widely expected to hold rates steady at this week’s meeting. Policymakers have expressed a desire to assess the full impact of tariffs, some of which are set to increase to nearly 50 percent on countries that have not finalized trade deals with Washington.

After cutting rates by a full percentage point last year, the Fed has paused further moves in 2025 amid concerns that the trade war could reverse progress toward its 2 percent inflation goal. A potential cut could come at the September FOMC meeting, depending on incoming economic data.

Market Reactions

Markets are closely watching for signs of a policy shift. Jonathan Gray, president of Blackstone Group, told the Financial Times that declining wage inflation and slowing rent increases could give the Fed room to cut rates later this year.

For now, tensions between the White House and the Fed remain high, with Trump’s aggressive campaign raising questions about the central bank’s independence.