Microsoft Stock Plummets Amid AI Growth Concerns and Copilot Adoption Struggles

Microsoft shares tumbled 10% in a single trading session following its fiscal Q2 2026 earnings report, now down 22% from all-time highs. The tech giant's $393.58 closing price reflects growing Wall Street skepticism about its AI monetization capabilities despite 16.7% annual revenue growth.

Azure's cloud revenue growth decelerated to 39% year-over-year from 40% last quarter, while the company faces staggering concentration risk—$281 billion of its $625 billion backlog depends solely on OpenAI. Capital expenditures surged to $37.5 billion amid shrinking gross margins.

The Copilot AI assistant shows particularly concerning adoption metrics. Only 15 million of 400 million Microsoft 365 enterprise users (3.7%) have purchased subscriptions—a penetration rate that doubled year-over-year but remains far below expectations. This slow uptake in core productivity software integrations raises fundamental questions about AI's near-term revenue potential.