Marcin Frąckiewicz

January 29, 2026, 1:42 PM EST. Microsoft shares fell following its January 28 fiscal Q2 report as investors digested slower Azure cloud growth and increased capital expenditure (capex) on artificial intelligence (AI). While profits remained strong with a 46.27% operating margin, concerns linger about short-term earnings pressure from heavy AI investment, offset by potential long-term gains. Azure demand is robust but decelerating. Microsoft's valuation remains high at about 34 times trailing earnings, reflecting confidence in future growth despite current margin pressure. The stock's technical signals show neutral momentum, with cautious traders eyeing a 12-month fair value near $528. Australian investors should consider currency risk with AUD/USD fluctuations affecting returns when holding Microsoft shares traded in U.S. markets.