Microsoft Shares Slump Amid Cloud Growth Concerns and AI Spending
Microsoft shares tumbled 12% to $425 despite beating quarterly revenue and earnings estimates. The selloff reflects mounting investor concerns over slowing Azure cloud growth, ballooning AI infrastructure costs, and reliance on a handful of major clients.
Morgan Stanley analysts noted Azure's growth barely cleared Microsoft's guidance while falling short of Wall Street's expectations. CFO Amy Hood acknowledged capacity constraints are hampering cloud expansion, with the company now aggressively investing to scale AI infrastructure—a MOVE that's squeezing margins.
The downturn underscores the heightened scrutiny facing tech giants as they race to monetize AI. Microsoft's earnings reveal the precarious balance between funding cutting-edge innovation and delivering shareholder returns in a maturing cloud market.
