Microsoft Shares Plummet Amid Cloud Slowdown, AI Investment Concerns

Capital expenditures for the fiscal second quarter hit $37.5 billion, up 66% from a year earlier and exceeding analyst estimates for $36.2 billion.

Technology

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Moneycontrol•29-01-2026, 21:53

Microsoft Shares Plummet Amid Cloud Slowdown, AI Investment Concerns

•Microsoft shares dropped 11% to $429.24, the largest intraday slide since March 2020, due to record spending and slowing cloud growth.
•Capital expenditures hit $37.5 billion, a 66% increase year-over-year, surpassing analyst estimates.
•Azure cloud revenue grew 38%, meeting projections but slowing by one percentage point from the previous quarter.
•Investors are concerned about high capital expenditure growth outpacing Azure's slightly slower growth, questioning the return on AI investments.
•Microsoft CEO Satya Nadella reported 15 million M365 Copilot subscriptions, indicating growing AI adoption among corporate users.

Why It Matters: Microsoft's stock fell sharply as high AI investment costs and slowing Azure growth raised investor concerns.

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