Explained: Why Microsoft shares rallied 9% in extended trading after Q4 earnings despite AI worries

Microsoft shares sharply rallied nearly 9% in extended trading hours on Wednesday after the tech giant’s Q4 earnings beat expectations, despite global worries around hyperscalers increasing their already massive AI spending.

In post-market hours on Wednesday, Microsoft said it expects to keep generating cash through fiscal 2027 and provided a capital expenditure estimate below Wall Street expectations following an accounting change for data centre leases.