Microsoft stock dips as AI spending worries linger, with OpenAI exposure back in focus

2 February 2026

New York, Feb 2, 2026, 10:58 (EST) — Regular session

Microsoft shares slipped roughly 0.6% by mid-morning trading
Traders are still working through last week’s steep post-earnings drop, linked to concerns over cloud growth and AI expenses
Next up: Alphabet and Amazon earnings, along with the February 6 U.S. jobs report, will be key near-term indicators

Microsoft shares slipped roughly 0.6% to $427.58 on Monday. Investors remain cautious over the expenses tied to the company’s AI expansion and the speed of its cloud growth. The stock has had trouble finding footing since tumbling after last week’s earnings report.

Microsoft ranks among the largest components of the Nasdaq and S&P 500, so its moves often ripple across the wider market. As more mega-cap earnings roll in this week, investors are zeroing in on AI-related expenses and capital spending to see if those investments are beginning to weigh on profits.

U.S. stocks showed mixed moves following a steep drop in precious metals as investors braced for a packed slate of earnings and economic reports. By 9:46 a.m. ET, the Dow had gained 0.48%, the S&P 500 edged up 0.14%, while the Nasdaq slipped 0.07%. “You’re seeing a change in mindset in where investors look for leadership,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. Reuters

Microsoft drove last week’s tech sell-off, dropping 10% on Jan. 29 and erasing over $350 billion in market value. In contrast, Meta jumped 10% following its earnings report. “Microsoft’s deep ties to OpenAI underpin its leadership in enterprise AI, but they also introduce concentration risk,” noted Zavier Wong, a market analyst at eToro. Reuters

Microsoft reported a jump in capital spending to $37.5 billion in its fiscal second quarter, with Azure and other cloud services revenue up 39%, slightly beating forecasts. The company projects Azure growth of 37% to 38% this quarter and revealed its cloud backlog — sales contracted but not yet booked — has more than doubled to $625 billion, nearly 45% linked to OpenAI. Still, investors are uneasy about rising costs. “Revenues are up 17% and the cost of revenues are up 19%,” noted Eric Clark, portfolio manager at the LOGO ETF. Reuters

Microsoft returned $12.7 billion to shareholders this quarter via dividends and share buybacks, while its Microsoft Cloud revenue hit $51.5 billion. Net income climbed 60% year-over-year to $38.46 billion, driven in part by gains related to its OpenAI investment.

Some investors argue the real battle is timing—how quickly AI assistants and cloud deals translate into reliable profits, not just revenue growth. At the moment, the market is front-loading the cost.

That downside risk remains. Should capex remain elevated while cloud demand slips, margins could compress rapidly — dragging the stock into a prolonged rerating, even if revenue holds steady.

Upcoming catalysts are just around the corner. Alphabet and Amazon are set to report earnings later this week, while Friday’s U.S. nonfarm payrolls data on Feb. 6 could heavily influence rates, risk appetite, and the direction of mega-cap tech stocks.

Shan Ahmed Khan Latest posts

Shan Ahmed Khan is a senior markets reporter at TS2.tech. His coverage ranges from stocks and technology to economic developments across global markets. He worked in investment research and market analysis before becoming a financial journalist and is a graduate of the Lahore University of Management Sciences (LUMS).

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