Microsoft's stock tanks 12%—even after solid earnings
Microsoft's shares slid nearly 12% on Thursday, January 29, 2026, wiping out $400 billion in value.
The big drop came even though the company beat earnings expectations, as investors worried about Microsoft's massive $37.5 billion spending spree (up 66% from last year) and slower growth in its Azure cloud business.
Why does this matter?
Even tech giants aren't immune to market jitters—especially when it comes to big bets on AI.
Investors are getting impatient for clear results from Microsoft's heavy spending on artificial intelligence, wanting to know when those investments will actually pay off.
What's behind the numbers?
Despite the selloff, Microsoft posted strong Q2 numbers: revenue jumped 17% to $81.3 billion and profits beat forecasts.
The Intelligent Cloud segment was a bright spot, with Azure revenue up 39%.
Still, analysts trimmed their price targets but mostly kept positive ratings, showing they're cautious but not losing faith just yet.