New York, January 31, 2026, 08:53 EST — Market closed.
Shares of Microsoft (MSFT.O) fell 0.7% to close at $430.29 on Friday, slipping for the second day in a row following a sharp 10% plunge the day before—their worst daily drop since March 2020. (Reuters)
This matters because Microsoft ranks among the market’s largest firms and is a key component in major indexes, meaning big moves often ripple through broader risk sentiment. Next week, investors will digest a heavy slate of megacap earnings alongside U.S. economic reports, even as patience wears thin for companies pouring money into artificial intelligence. (Reuters)
The selloff came amid concerns that Microsoft’s cloud growth is lagging behind expectations, despite an uptick in capital spending. The company also revealed that OpenAI makes up 45% of its cloud backlog—work contracted but not yet recognized as revenue—a concentration some investors see as a new risk if demand changes. (Reuters)
Microsoft expects Azure growth to hold steady at 37% to 38% in the January-March quarter, Reuters reported, following a slowdown in late 2025 linked to AI chip shortages. CFO Amy Hood said the figure “would have been over 40%” if new GPUs had been distributed differently. (Reuters)
Microsoft reported a 17% revenue jump to $81.27 billion for the quarter ending Dec. 31. Its cloud business surged 26% to $51.5 billion, driven by a 39% increase in Azure and other cloud services, the company confirmed. (Microsoft)
Microsoft released its earnings in an 8-K report filed with the SEC on Jan. 28. (SEC)
Traders are watching closely to see if the strain hits other “hyperscalers” funding major AI projects. Alphabet is set to report earnings on Feb. 4, followed by Amazon on Feb. 5, both after markets close. (Alphabet Investor Relations)
The catch for Microsoft bulls? The debate now hinges less on demand and more on timing: chip supply constraints and data-center expansions could limit near-term growth even as customer sign-ups continue. Another risk: investors might remain harsh if spending outpaces returns, particularly if attention swings back to rates and growth. (Reuters)
Capital spending, or capex, remains another key variable — this is the cash poured into equipment and data centers. Microsoft anticipates a drop in capex for the January-March quarter following $37.5 billion spent in the October-December stretch, Reuters reported. Still, those headline figures have already sparked concern among investors. (Reuters)
Macro factors might weigh in as well. The U.S. jobs report for January drops on Feb. 6, and a strong reading could stoke fears that interest rates will remain elevated for longer — typically a drag on pricey tech stocks. (Bureau of Labor Statistics)
When U.S. markets open Monday, all eyes will be on whether Microsoft can steady itself after a steep two-day sell-off. Investors will also zero in on the upcoming megacap earnings, led by Alphabet and Amazon, plus Friday’s payroll data, to see if they shift the story on AI spending and cloud growth. (Alphabet Investor Relations)
