NEW YORK, Jan 28, 2026, 17:42 EST — After-hours
- After Microsoft released its fiscal second-quarter results, MSFT shares swung in after-hours trading.
- Investors focused on cloud growth, weighing it against the surge in AI infrastructure spending.
- The next triggers will be management’s outlook and their stance on capex.
Microsoft Corp (MSFT) shares gained 0.2% to $481.63 in after-hours trading Wednesday, rebounding from a steep drop that at one point wiped out more than 7%. The stock swung between $445.00 and $484.34 during the session, putting the company’s market cap near $3.85 trillion.
The shift is crucial since Microsoft now serves as a daily test of whether Big Tech’s AI efforts can generate steady revenue. Investors seek evidence that cloud clients continue to spend despite rising costs.
Azure is the linchpin. Even a slight change in its growth trajectory can reshape forecasts for cloud rivals and the vendors supplying data centres with chips, servers, and networking equipment.
Microsoft’s capital spending soared to a record $37.5 billion in the October-December quarter, a jump of nearly 66% from a year ago. About two-thirds of that was funneled into computing chips, the company reported. Azure revenue climbed 39%, slightly beating the 38.8% consensus from Visible Alpha. Still, investors kept circling back to the hefty spending. “Microsoft’s stock sentiment is heavily levered towards how OpenAI is doing,” said Ryuta Makino, a research analyst at Gabelli Funds, highlighting a competitive landscape that now features Google’s Gemini and Anthropic’s Claude Cowork. 1
Microsoft reported a 17% revenue gain to $81.3 billion for its fiscal Q2 ending Dec. 31. Operating income rose 21% to $38.3 billion, while non-GAAP diluted EPS jumped 24% to $4.14. Cloud revenue hit $51.5 billion, with Azure and related services soaring 39%. The commercial remaining performance obligation—a backlog metric—more than doubled, climbing 110% to $625 billion. CEO Satya Nadella said the company is “only at the beginning phases of AI diffusion,” as CFO Amy Hood noted cloud revenue topping $50 billion. 2
Now the tougher challenge: guidance. Traders want to see how quickly capital spending will ramp up in the March quarter and whether AI demand continues to outstrip capacity.
Wedbush analyst Dan Ives called Microsoft the “clear front-runner on the enterprise hyper-scale AI front,” despite rising competition from Amazon and Google. 3
The downside is straightforward. If spending outpaces revenue growth, margins and cash flow will shrink. And with a stock valued for consistent expansion, even a minor hiccup in cloud execution could trigger a sharp sell-off.
The Invesco QQQ Trust, tracking the Nasdaq 100, ticked up 0.3% in late trading. Microsoft’s post-earnings move stood out as one of the biggest single-stock drivers in the sector.
At this point, all eyes are on management’s forecast and any new information about the data-centre expansion. The real test will arrive Thursday, Jan. 29, at the U.S. open, when investors have a full day to digest and react to the guidance.
