Why is Microsoft stock soaring?

Shares of Microsoft continued to climb on Friday, after soaring 15% a day earlier in the largest one-day growth in market value ever recorded for any company.

The tech giant added about $450 billion in value on Thursday, and its market capitalization stood at $3.4 trillion as of Friday afternoon, ranking it the fourth-largest company worldwide.

The staggering rise was set off by a better-than-expected earnings release on Thursday morning. The company reported $90 billion in revenue over three months ending in June, which marked an increase of 18% from the same quarter a year earlier.

The firm's profits, meanwhile, surged 31% compared to the same three-month period a year earlier, Microsoft said.

Stock traders drew confidence from the robust performance of Microsoft's artificial intelligence-related products, even more so as the company managed to invest less than expected into that part of its business, Tal Liani, a research analyst at Bank of America Global Research, said in a memo to clients shared with ABC News.

Microsoft said it boasts more than 30 million paid seats for its Microsoft 365 Copilot AI product, an increase from the previous quarter. Its AI-fueled Intelligent Cloud also delivered a nearly one-third jump in revenue compared to the same quarter a year earlier, according to the company.

The company said it invested $41 billion in capital expenditures that included leasing. That figure came in just shy of an expected $42 billion in spending.

Taken together, the earnings provided "increasing validation of Microsoft's AI strategy," Liani said.

In a statement on Thursday, Microsoft CEO Satya Nadella touted the earnings as a sign of progress for the company's AI efforts.

A boost in revenue and clients for some AI products had reflected "the confidence customers are placing in us to power their AI transformation," Nadella said.

As of Friday afternoon, shares of Microsoft had jumped 2.3% during the day's session, meaning the stock had climbed more than 17% since the start of trading on Thursday.

Still, the stock remains down since the start of the year, having fallen 5% over that period.

Earlier this month, Microsoft said it would lay off 4,800 employees.

The layoffs will affect 2.1% of Microsoft's global workforce, Amy Coleman, executive vice president and chief people officer, said in a public memo to employees.

Coleman attributed the layoffs in part to a shakeup in the tech sector wrought by AI. None of the terminated roles will be replaced by AI, Coleman noted. At the same time, she acknowledged: "AI is changing how work gets done."

In a separate statement, Microsoft said a large share of the job cuts would impact its Xbox department, which oversees the company's popular video game console.

Xbox CEO Asha Sharma pointed to weaker-than-expected performance for its subscription service, Game Pass, which charges a monthly fee for access to a collection of games. The company faced stiff competition in its efforts to increase output of new games, Sharma added.