Microsoft's stock just logged its best three-day performance in 26 years, showing how investors are looking at the company in a new light following its recent upbeat financial results.

The tech giant's stock $(MSFT)$ gained 4.9% on Monday and has risen 24.9% over the past three sessions - making for its best such stretch since October 2000, when it climbed 29.24% across a three-day span, according to Dow Jones Market Data. Microsoft shares have now turned positive for the year and are up about 0.8% for 2026 to date, as concerns over its artificial-intelligence plans have eased.

In its earnings results last week, Microsoft reported accelerating revenue growth in its Azure cloud business and said that its Copilot AI assistant has reached more than 30 million paid seats. Net seat adds are more than doubling sequentially, CEO Satya Nadella noted.

Will Rhind, CEO of exchange-traded-fund provider GraniteShares, said investors took those numbers as proof that Microsoft's investments in AI are paying off.

"The reason this rally has legs is that Microsoft finally answered the question the market has been asking for 18 months," Rhind told MarketWatch in emailed comments, referring to whether heavy capital expenditures could produce adequate returns.

Rhind said Monday's stock action "isn't just an earnings hangover" but a rerating of Microsoft's progress with AI - meaning that the market is coming to ascribe a higher multiple to the shares.

Luke Rahbari, a portfolio manager at Rational Equity Armor Fund, said in emailed comments that the market is "getting into uncharted territory" with corporate spending on AI as hyperscalers try to stay competitive. But in his view, Microsoft and other hyperscalers are "investing at these levels for a reason."

Microsoft assured investors in its earnings report that it doesn't expect to see negative free cash flow for its new fiscal year.

Even as spending gets larger, Microsoft and its hyperscaler peers "broadly reiterated an inability to keep pace with demand despite the voracious buildout," William Blair analyst Sebastien Naji said in a note.