New York, February 6, 2026, 16:03 (ET) — Into after-hours trading
- MSFT clawed back roughly 1.5% Friday after tumbling 5% the day before.
- Stifel’s unusual downgrade sharpened the spotlight on Azure’s ongoing capacity constraints and mounting AI expenses.
- Investors are eyeing those mounting AI infrastructure costs at Big Tech, questioning if ballooning bills will squeeze margins before any revenue gains show up.
Microsoft (MSFT.O) finished Friday’s session up 1.5% at $399.45, recovering part of Thursday’s steep drop. Shares bounced between $392.92 and $401.31 throughout the day. 1
Investors are rethinking the pace of the AI-driven capital spending wave and questioning just when the payoff lands. Microsoft slid 5% Thursday. Alphabet (GOOGL.O) put as much as $185 billion in 2026 spending on the table, putting the focus squarely back on the return side of the ledger. “We’re seeing this volatility about whether this investment will translate… into results,” said Tom Hainlin, investment strategist at U.S. Bank Wealth Management. 2
Amazon.com (AMZN.O) ratcheted up the stakes on Friday, revealing plans for a $200 billion capital spend in 2026. Tech heavyweights in the U.S. are now targeting a collective investment north of $630 billion for data centers and AI chips. “The magnitude of the spend is materially greater than consensus expected,” analysts at MoffettNathanson said, adding a caution: “the margin of error is shrinking.” 3
It’s not just the bill drawing concern. Software and data stocks are under pressure, with investors worried that new AI products could sap demand—a concern Reuters noted was partly sparked by Anthropic’s latest Claude plug-in. “It got too pricey,” said Andrew Wells, chief investment officer at SanJac Alpha. Carlota Estragues Lopez, a strategist at St. James’s Place, added that investors are reading the headlines “far more cautiously.” 4
Microsoft caught some flak Thursday after Stifel slashed its rating on the tech giant to Hold from Buy and chopped the price target to $392 from $540. Analyst Brad Reback said it was “time for a break” and described projections for 2027 as “too optimistic.” Reback flagged Azure’s supply issues along with mounting AI rivalry. Stifel also pushed its estimate for Microsoft’s fiscal 2027 capital spending up to roughly $200 billion. 5
U.S. tech shares snapped back Friday, lifted by a surge in chipmaker names after a bruising stretch. “The market looks like it was getting a bit overdone to the downside,” said Robert Pavlik, senior portfolio manager at Dakota Wealth. 6
Microsoft’s quarterly results, out in late January, showed revenue up 17% to $81.3 billion for the period ending Dec. 31. Azure and the rest of its cloud services jumped 39%. “Microsoft Cloud revenue crossed $50 billion this quarter,” CFO Amy Hood noted. 7
The core issue still stands—investors are after firmer evidence that all this spending translates to lasting profit instead of simply stacking up more servers. A hiccup in cloud growth, or another round of surprise spending, could wipe out any relief rally in a hurry.
Microsoft’s fiscal Q3 numbers drop April 29, per Yahoo Finance’s earnings calendar. Investors are keyed in on updates around spending, capacity, and how fast AI products actually start to show up in revenue. 8
