Why Microsoft Stock Is Getting Hammered Today

Microsoft shares are taking a beating as Wall Street reacts to disappointing earnings and weak forward guidance.

Cloud Growth Cools Off

Azure revenue growth slowed for the third consecutive quarter, missing analyst expectations by a wide margin. The cloud division—once Microsoft's unstoppable engine—now faces intensified competition and enterprise spending pullbacks.

AI Investments Not Paying Off Yet

Billions poured into artificial intelligence infrastructure haven't translated into meaningful revenue. The much-hyped Copilot ecosystem shows strong engagement but weak monetization—subscribers aren't upgrading at anticipated rates.

Regulatory Headwinds Intensify

Fresh antitrust investigations in both the EU and US create additional uncertainty. Potential breakup scenarios—once unthinkable—now get whispered in trading circles.

Meanwhile, crypto-native companies bypass traditional equity markets entirely—raising questions about whether legacy tech stocks still deserve their premium valuations in the decentralized era.

Image source: Getty Images.

Microsoft stock sinks on August jobs data

The BLS published its August jobs report this morning, and the results were significantly weaker than economists had anticipated. While the average forecast had called for the addition of 75,000 non-farm jobs in the month, only 22,000 jobs were actually added in the period according to the forecast.

The BLS revised jobs growth for July from 73,000 to 79,000, but it also revised its estimate for June and swung from its previous estimate of 14,000 jobs added in the period to 13,000 jobs lost in the month. While weakened hiring data supports the thesis that the Federal Reserve will cut interest rates this month, mounting signs of weakness for the U.S. economy are prompting sell-offs for Microsoft and other stocks today.

Tariff news is also pushing Microsoft stock lower

The Trump administration announced today that it will be rolling out new tariffs for chips that are manufactured outside of the country. Previous statements had suggested that chips produced bywould be exempt from new import taxes, but it looks like there has been a reversal  on the matter.

Microsoft uses chips fromand other chip leaders for its data center and artificial intelligence (AI) infrastructure. While many of the key chip designs originate from inside the U.S., most of the key chip manufacturing happens in TSMC's Taiwan-based manufacturing facilities. That suggests that Microsoft and other AI infrastructure leaders could soon face higher costs due to new tariffs.