New York, Jan 30, 2026, 10:19 EST — Regular session
- Microsoft climbed roughly 0.6% following Thursday’s 10% drop; Nvidia and AMD slipped, pulling down chip stocks
- Investors remain skeptical that Big Tech’s AI spending will drive growth anytime soon
- Next up: earnings from Alphabet, Amazon, and AMD, along with the U.S. jobs report for Feb. 6
Microsoft shares held steady on Friday morning, though the broader AI sector showed signs of strain. Investors are grappling with rising data-center costs amid cloud growth that’s failing to accelerate as expected. By 10:03 a.m. ET, Microsoft was up 0.6% at $436.11. Nvidia dipped 0.4%, AMD dropped 4.1%, and the Nasdaq-100 ETF QQQ slipped 0.6%.
The mood has grown pickier. Cash continues to pour into AI-linked firms, yet traders now want clearer evidence that hefty investments are driving lasting revenue gains—not just swelling depreciation costs.
That tension erupted Thursday. Microsoft plunged 10% after its cloud segment disappointed. Meanwhile, Meta surged 10%, buoyed by results investors viewed as evidence of smarter “AI spend that pays,” according to one portfolio manager. “The market’s attitude toward spending in the AI space” is shifting, said John Belton of Gabelli Funds. 1
Microsoft’s own figures added to investor jitters: capital spending hit $37.5 billion for the quarter ended December, soaring nearly 66% from a year earlier, with roughly two-thirds funneled into computing chips. Azure revenue climbed 39%, just above expectations, while CEO Satya Nadella revealed 15 million annual users for its $30-a-month M365 Copilot. He also cautioned that the AI transition remains in the “early innings.” “Revenues are up 17% and the cost of revenues are up 19%,” noted Eric Clark, portfolio manager at the LOGO ETF. 2
Chip stocks, which surged midweek after strong reports from Texas Instruments and ASML, stumbled again on Friday. “Conditions are improving and that they are expanding their growth plans,” said Louise Dudley, a portfolio manager at Federated Hermes, highlighting rising demand throughout the AI supply chain. 3
Nvidia faced its own headline risk as China granted startup DeepSeek conditional approval to buy Nvidia’s H200 AI chips, sources told Reuters. Regulators are still finalizing the terms. CEO Jensen Huang, speaking in Taipei, said he hadn’t been informed of this. Any H200 sales could face scrutiny in Washington. DeepSeek plans to launch its next model, V4, in mid-February, Reuters reported, citing The Information. 4
The broader macro environment weighed on markets. U.S. stocks started off in the red following President Donald Trump’s nomination of former Federal Reserve Governor Kevin Warsh to head the central bank, prompting investors to rethink rate expectations for 2026. 5
Memory is another tangled risk in the system. Microsoft’s CFO cautioned that rising memory prices might chip away at cloud margins over time. Apple also pointed to a “memory-chip crunch” threatening to squeeze gross margins, highlighting how AI-driven data-center demand can drive up costs throughout the tech stack. 6
Next week throws tougher challenges into the spotlight. Alphabet, Amazon, and AMD are all set to report results, and investors will be scrutinizing their capex plans closely. “Capex spending on building out AI infrastructure will not see any let up,” said Sid Vaidya, chief investment strategist at TD Wealth. Then there’s Friday’s U.S. jobs report on Feb. 6—a crucial gauge of growth and interest rates—arriving just as the market’s patience with pricey AI wagers grows thin. 7
