NEW YORK, Feb 2, 2026, 18:06 EST — After-hours
- MSFT dropped roughly 1.6% to $423.37 in after-hours trading, having fluctuated between $422.34 and $430.60 during Monday’s session.
- Attention stays fixed on Microsoft’s AI-driven capital expenditures and the Azure outlook following last week’s earnings release.
- Traders have their eyes on Alphabet and Amazon earnings this week, with Fed minutes due on Feb. 18, while the shutdown casts doubt over key U.S. data.
Shares of Microsoft Corp slipped 1.6% to $423.37 in after-hours trading Monday, dropping $6.96 from the prior close of $430.33. The stock’s range during the session was $422.34 to $430.60.
This shift carries weight since Microsoft ranks among the market’s largest players and signals how far investors will go for the “AI trade” amid rising spending. If the market dips a few more times, portfolio managers will circle back to the same question: are data centers fueling growth, or just buying time?
U.S. stocks climbed Monday, with the S&P 500 gaining 0.54%, the Nasdaq 0.56%, and the Dow jumping 1.05%, buoyed by chip stocks. Alphabet reached a new high and Amazon edged up ahead of their earnings reports due this week. The Bureau of Labor Statistics announced it won’t publish January employment figures Friday due to the partial government shutdown. “The fundamentals are good and earnings are strong,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder. (Reuters)
Microsoft reported fiscal second-quarter revenue of $81.3 billion last week, a 17% increase, with Azure and other cloud services revenue jumping 39%. “We are only at the beginning phases of AI diffusion,” said Satya Nadella. Amy Hood highlighted that Microsoft Cloud revenue topped $50 billion for the quarter. The company also revealed a commercial remaining performance obligation—contracted work not yet recognized as revenue—of $625 billion. (Microsoft)
Investors remain focused on the bill. Capital spending hit $37.5 billion in the October-December quarter, jumping nearly 66% year-over-year, with roughly two-thirds funneled into computing chips. Microsoft projects Azure growth of 37% to 38% this quarter. Hood noted capital spending should dip slightly from the recent quarter, though rising memory-chip costs will pressure cloud margins over time. “Revenues are up 17% and the cost of revenues are up 19%,” said Eric Clark, portfolio manager of the LOGO ETF. (Reuters)
Capital spending, or capex, refers to investments in long-term assets such as servers and data centers. For cloud companies, it sets the stage for future growth but can squeeze cash flow and hurt margins until revenue catches up.
Microsoft’s next test might come from how its cloud competitors perform. If rivals report steadier growth without a surge in spending, investors could pressure Microsoft over its expansion speed—and how quickly it can convert AI interest into paying customers.
The bet could still swing the opposite way. Should AI capacity demand remain strong, Microsoft might find it tough to cut back on spending without jeopardizing business. A slip in cloud bookings could quickly worsen the cost picture.
Macro factors still drive daily stock moves. Tech shares often react to shifts in interest-rate expectations, since higher rates cut the present value of future profits — hitting long-duration growth stocks hardest.
The shutdown complicates things further by delaying key labor-market data, at least for the moment. Without a clear Microsoft-specific catalyst lined up for Tuesday, traders expect the stock to follow the broader market and earnings news.
Investors face another interest rate checkpoint later this month, with the Federal Reserve set to publish minutes from its Jan. 27-28 meeting on Feb. 18 at 2 p.m. ET. For now, Microsoft’s main focus will be on how other Big Tech companies report on cloud demand during this week. (Federal Reserve)
