What were the main reasons for Microsoft's stock plunge after its Q2 earnings?

Microsoft's shares fell 10-12% due to slowing Azure cloud growth at 39% (down from 40% prior quarter and below some expectations), high AI-related capital expenditures of $37.5 billion, capacity constraints, and weaker guidance for the More Personal Computing segment.

How much market value did Microsoft lose in the stock drop?

Microsoft lost approximately $357 billion in market value as its stock tanked about 10-12% in its worst trading day since 2020.

What is the current status of Azure growth and capacity?

Azure grew 39% year-over-year in Q2, slightly down from 40% in Q1, with management citing GPU capacity constraints expected to persist at least through June 2026; demand exceeds supply.

What were Microsoft's key financial highlights despite the stock reaction?

Revenue reached $81.3 billion (up 17% YoY), adjusted EPS was $4.14, remaining performance obligations (RPO) doubled to $625 billion, and 76.5% of S&P 500 reporters beat earnings expectations.

What upcoming events could impact U.S. stock markets?

Alphabet and Amazon megacap earnings next week, U.S. nonfarm payrolls report on Feb. 6 expected to show 64,000 jobs growth, and Fed rate cuts priced in for June.

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24d ago

Microsoft Plunge Clouds U.S. Stocks Ahead of Jobs Report

Microsoft shares fell about 12% after investors focused on Azure growth and AI spending, while a Feb. 6 jobs report and megacap earnings will test markets.

Overview

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Microsoft Corp. shares plunged 12.1% on Thursday after investors focused on slowing Azure growth and hefty AI-related capital spending, trading data shows.

Alphabet Inc. and Amazon.com Inc. are among megacap companies scheduled to report quarterly results next week, adding pressure to market expectations, analysts said.

Following the Federal Reserve's recent policy meeting, markets are pricing in a hold on further rate cuts until June, traders said.

Of 166 S&P 500 companies that reported results by Friday, 127 companies, or 76.5%, posted earnings above analysts' expectations, LSEG IBES data shows.

The U.S. nonfarm payrolls report due Feb. 6 is expected to show growth of 64,000, according to a Reuters poll.

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: Microsoft's shares fell 10-12% due to slowing Azure cloud growth at 39% (down from 40% prior quarter and below some expectations), high AI-related capital expenditures of $37.5 billion, capacity constraints, and weaker guidance for the More Personal Computing segment.
Sources:
TechBuzz AI
: Microsoft lost approximately $357 billion in market value as its stock tanked about 10-12% in its worst trading day since 2020.
Sources:
TechBuzz AI
: Azure grew 39% year-over-year in Q2, slightly down from 40% in Q1, with management citing GPU capacity constraints expected to persist at least through June 2026; demand exceeds supply.
Sources:
Fortune
: Revenue reached $81.3 billion (up 17% YoY), adjusted EPS was $4.14, remaining performance obligations (RPO) doubled to $625 billion, and 76.5% of S&P 500 reporters beat earnings expectations.
Sources:
SM Daily Press
: Alphabet and Amazon megacap earnings next week, U.S. nonfarm payrolls report on Feb. 6 expected to show 64,000 jobs growth, and Fed rate cuts priced in for June.
Sources:
TechBuzz AI