New York, Jan 23, 2026, 16:02 (EST) — After-hours
- Shares of Microsoft jumped roughly 4% on Friday, beating the flat performance seen across the broader market.
- Traders are eyeing next week’s earnings reports and the Federal Reserve decision to gauge the next market move.
- Microsoft 365’s outage lingers as rapid AI spending continues to escalate.
Shares of Microsoft Corp climbed 3.8% to $468.31 on Friday, swinging between $449.05 and $471.07 during the session. The rally pushed the software giant’s market capitalization to roughly $3.85 trillion.
The timing couldn’t be trickier for those trying to predict the market. Next week, a slew of earnings reports from the “Magnificent Seven” mega-cap tech giants—the key players that often move U.S. indexes—arrive just days before the Fed’s rate decision on Wednesday. “Earnings are the driver,” said Chris Galipeau, senior market strategist at Franklin Templeton. PNC’s Yung‑Yu Ma described the recent stretch as a “short but steep roller‑coaster ride.” 1
Investors in Microsoft are tuning out the daily chatter and zeroing in on fundamentals: the pace of Azure’s growth, the cost of scaling AI capacity, and if those expenses hit the bottom line. Capital expenditures, or capex—the funds poured into long-term assets like data centers—have emerged as the key figure that can swing the stock.
U.S. stocks closed mixed on Friday. The Dow dropped 0.58%, and the S&P 500 barely moved, shaken by Intel’s disappointing forecast, though the Nasdaq managed a slight gain. “We feel pretty good about where we are today,” said Jason Blackwell, chief investment strategist at Focus Partners Wealth, citing expectations for strong earnings but cautioning about “twists and turns” ahead. 2
Microsoft’s climb happened as investors shifted back toward big tech, while chipmakers and smaller growth stocks bore the brunt of earnings misses. Traders remain focused on whether the AI rally has already been priced in.
Microsoft also dealt with a stark example of large-scale hiccups. The company confirmed it had restored access to Microsoft 365 following an outage. According to Downdetector, reports dropped sharply to around 113 incidents from over 15,890 at the previous day’s height. The outage hit multiple services, including Outlook, Microsoft Defender, and Microsoft Purview, Reuters reported. 3
Outages usually don’t move the needle much in the immediate headlines. What really counts is what they reveal: execution risk, rising customer frustration, and how fast a company can bounce back and fix its core products when things go wrong.
Microsoft’s name popped up off the screens as well, landing a fresh sponsorship deal with Mercedes. The team didn’t reveal any financial figures, but Sky News quoted an unnamed sponsorship expert who estimated the deal could be worth around $60 million annually. 4
The real challenge, however, lies ahead. With valuations stretched, there’s little wiggle room for a weak outlook. Investors are jittery over any hint that AI expansion is burning through cash faster than revenue can keep pace. If cloud growth falters or spending surges, Friday’s gains could unravel fast.
Microsoft will release its fiscal 2026 second-quarter earnings after the market closes on Wednesday, Jan. 28. The company plans to hold a webcast at 2:30 p.m. Pacific Time, with CEO Satya Nadella and CFO Amy Hood leading the presentation. 5
