Microsoft Reclaims $4 Trillion, Now Just $266 Billion Behind Nvidia

Microsoft closed Monday at $545.18, up 2.75%, lifting its market value back to $4.048 trillion. Nvidia fell 4.27% the same day to $178.67, leaving it worth $4.314 trillion — a lead of about $266 billion, or roughly 6% of Microsoft's value. On October 6, that same lead stood near $1.84 trillion. The gap between the two biggest AI beneficiaries has collapsed in five weeks.

Both companies just reported strong AI quarters. What changed is how differently they monetize AI — and the fact that only one of them now faces a question about its leadership.

What is dragging on Nvidia's stock?

Nvidia's board has opened an independent investigation into national security concerns that news reports raised about CEO Jensen Huang. Huang disclosed the probe in a November 8 letter to employees and said he will cooperate fully. U.S. authorities reportedly determined that Huang had an affair with an alleged Chinese spy — a reported allegation. The board says it has no reason to believe national security or company secrets were compromised.

The market reaction was blunt. Nvidia closed Monday at its lowest level since April 7, on a day when the S&P 500 rose 2.35%. No single factor explains Microsoft's gain, but investors who wanted big-tech exposure without a company-specific problem appear to have found it in Microsoft.

How do the two AI engines compare?

The numbers from the latest reports split cleanly along business-model lines:

• Revenue growth: Microsoft, up 18.8%; Nvidia, up 105.8%
• AI engine: Microsoft's Azure grew 48%; Nvidia's Data Center segment grew 117%
• Forward signal: Microsoft carries a $677 billion commercial backlog; Nvidia guided to $108.0 billion in third-quarter revenue

Microsoft sells cloud capacity and software to businesses. CFO Amy Hood put it plainly: "We still have demand that exceeds supply." That shortage explains why capital spending hit $45.2 billion last quarter, and why Microsoft expects it to top $50 billion in the current quarter.

Nvidia sells the chips inside those data centers — including the Vera Rubin GPUs Microsoft has already installed. Because memory prices are so high, Nvidia's management expects gross margin to bottom at 71% to 72% in the fourth quarter. Its supply commitments have reached $279 billion, and the board probe raises a leadership question its operations have not.

Not everything at Microsoft is strong. Windows OEM and Devices revenue fell 22%, and management expects a mid-30s percentage decline this quarter. That unit, however, is small next to the commercial backlog.

Why does November 17 matter?

October CPI lands Tuesday at 8:30 a.m. ET. Nvidia's earnings are expected after the close on November 17, though the company has not confirmed the date. Microsoft could pass Nvidia if the board probe drags on, but that remains speculation. Strong Vera Rubin numbers would likely widen the gap again.

Which company holds the stronger hand?

Microsoft, for now. Its stock is up about 12.7% in 2026, while Nvidia is down 3.97%. The 58 analysts covering Microsoft carry an average price target of $636.12, and the stock trades at 30 times earnings versus 36 for Nvidia. Microsoft's AI revenue also spans a wide range of enterprise customers, businesses now building agents into their everyday work.

The main risk sits in the capex line: Microsoft plans to spend roughly $170 billion on capital projects this calendar year. If Azure falls short of management's 49% to 50% constant-currency growth forecast, that spending gets harder to justify — and Nvidia's position would likely improve once its board finishes the review. Until then, the $266 billion gap and the November 17 print will define the race.