New York, Jan 26, 2026, 09:39 (EST) — Regular session
- Shares of Microsoft dropped roughly 0.6% in early trading, following a close at $465.95 last week
- With Microsoft’s fiscal Q2 earnings due Wednesday, investors are already making their moves.
- Attention centers on Azure’s expansion and the expenses tied to building out AI data centers
Microsoft (MSFT.O) shares dipped about 0.6% to $462.94 shortly after Monday’s open. The software giant’s market cap hovered around $3.85 trillion, solidifying its role as a major mover in the indexes.
The retreat arrives at a tricky time. Microsoft is set to release its fiscal second-quarter earnings on Wednesday, with Chairman and CEO Satya Nadella and CFO Amy Hood scheduled to host the call, per the company’s investor events calendar. (Microsoft)
Here’s why it’s crucial now: Azure offers one of Wall Street’s sharpest insights into corporate cloud budgets and how quickly AI is taking hold. Microsoft’s capital spending also plays a key role — this is the cash it invests in data centers, chips, and network equipment that drive AI and cloud services.
In its latest quarterly outlook, Hood warned demand continues to outpace supply. She noted Microsoft expects Azure revenue growth around 37% in “constant currency” for the December quarter—this metric excludes foreign-exchange fluctuations. Hood added the company now anticipates capacity constraints lasting at least through the end of its fiscal year. She also highlighted that Microsoft is “increasing our spend on GPUs and CPUs” as demand picks up. (Microsoft)
Broader markets opened flat to slightly up. The Dow and S&P 500 posted modest gains, while the Nasdaq barely moved as traders prepared for a busy earnings slate and key central bank updates this week, Reuters reported. (Reuters)
Microsoft is facing renewed questions about Windows reliability after a rough patch with Windows 11 updates early this year. On Jan. 24, the company rolled out an “out-of-band” update—an unscheduled fix—following user reports that apps froze when opening or saving files to cloud services like OneDrive and Dropbox, according to Microsoft’s release notes. The Verge also noted that Microsoft is looking into boot failures linked to the January security patch. (Microsoft Support)
For investors, the key issue is whether cloud demand will continue to outpace capacity—and how fast Microsoft can translate that into profits. Azure goes toe-to-toe with Amazon’s AWS and Alphabet’s Google Cloud, so changes in enterprise spending tend to hit earnings reports fast.
But there’s a catch. If Microsoft reveals a sharper-than-expected slowdown in Azure growth or flags rising costs tied to its AI expansion, the stock could come under pressure despite strong top-line revenue. Add to that persistent software patch problems, and you’ve got a separate concern: whether IT departments might start resisting upgrade cycles.
Wednesday brings Microsoft’s earnings, with the spotlight on Azure growth, AI-driven demand, and any shifts in its capital spending plans. The Federal Reserve wraps up its two-day session on Jan. 28, releasing a policy statement at 2 p.m. ET and holding a press conference at 2:30 p.m.—moves that could shake rate-sensitive megacaps. (Federalreserve)
