New York, April 20, 2026, 11:35 EDT
Microsoft slipped roughly 1.3% to $417.23 Monday, with its April 29 earnings report on deck and investors divided over the company’s AI strategy—some betting on a bounce, others bracing for further declines. The shares are still off about 23% from their October 2025 high.
The timing isn’t just a footnote for one name. Nasdaq just put up its longest run of gains since 1992, with tech heavyweights once again pulling most of the load. Fresh questions hang over whether the huge bets on AI will translate into payoff soon enough. Reuters noted Monday that cloud majors—Microsoft, Amazon, Alphabet, Meta—are on track to spend roughly $635 billion this year. Rising energy bills, though, still threaten to eat into those returns.
Microsoft is set to release its fiscal third-quarter numbers after markets close on April 29, according to the company. Alphabet and Meta, Reuters noted, are also on the calendar that day, putting all three cloud heavyweights under scrutiny as investors watch to see if relentless spending on data centers and chips starts to squeeze margins or test their patience.
Revenue’s looking robust, but spending is another story. Microsoft’s December quarter brought in $81.3 billion, a 17% jump. Azure and other cloud services surged 39%. The company’s commercial remaining performance obligation—a metric for future contracted revenue—shot up 110% to hit $625 billion. Still, Reuters flagged a nearly 66% spike in capex to $37.5 billion, a figure that unsettled investors even as the top line cleared estimates.
BNP Paribas is sounding a cautious but still bullish note. Analyst Stefan Slowinski dropped his Microsoft price target down to $556 from $659 as of April 10, though he maintained the Outperform rating, per a third-party summary. The move comes after factoring in boosted cash capex and a bigger chunk of new capacity going toward internal Microsoft products and systems. “The ‘SaaS Smash’ has not spared Microsoft,” Slowinski said in comments published by TheStreet on Saturday, nodding to the recent software pullback. TipRanks
Bulls aren’t out of arguments yet. Bernstein’s Mark Moerdler, in a recent note, pointed to the gap between spending and revenue as a “timing rather than any fundamental problem with the business.” And Barron’s flagged a KeyBanc survey showing close to half of IT and cybersecurity execs with Copilot already in production, with 85% looking to boost Azure budgets. TheStreet
Microsoft’s story looks a little different. Back in January, Chief Executive Satya Nadella described the company’s AI business as “larger than some of our biggest franchises.” Chief Financial Officer Amy Hood put Microsoft Cloud revenue at over $50 billion for the quarter. Reuters had Nadella revealing 15 million annual users for M365 Copilot, the company’s AI assistant aimed at business customers and priced at $30 per month. Microsoft
Skeptics are sticking around. On Friday, a Seeking Alpha piece cautioned that Microsoft might slip another 30%, with the author pointing to the company’s tilt toward AI infrastructure and heavier capital needs over its traditional software business. It’s not an analyst’s official rating, but the note taps into the irritation among investors watching the company’s big spending fail to spark a convincing rebound in the stock.
The competitive squeeze is getting tighter. Back in February, Reuters reported Google Cloud posting 48% growth in the latest quarter—easily outpacing Azure’s 39% and Amazon Web Services’ 24%. Then in January, Reuters noted Google’s Gemini models had started landing heavyweight clients, including Apple. For Microsoft, this means Azure can’t afford to stumble, and any drag on Copilot sales is a bigger problem.
There’s a tougher risk lurking beneath the usual earnings chatter. BNP Paribas economists, quoted by Reuters, flagged that if the flood of AI spending actually materializes, soaring electricity costs might end up erasing much of the productivity upside investors are banking on. S&P Global Visible Alpha’s Melissa Otto, for her part, pointed out that even a pause in capex could easily spark a slide in equities. Consider Microsoft: if Azure can’t scale up enough, Copilot usage stays tepid, and energy bills keep going higher, the company’s next update might not move the needle on this debate.
Stocks slipped on Monday, with Wall Street losing some steam after fresh U.S.-Iran jitters. Still, the focus is rapidly shifting back to earnings. According to Reuters, the S&P 500 and Nasdaq pulled back from their record peaks, and the next round of results from heavy hitters—Microsoft, Alphabet, and Meta—lands next week. Microsoft’s quarterly figures, in particular, are set to draw extra scrutiny this time.
