New York, Feb 9, 2026, 09:34 EST — Regular session.
Microsoft Corp (MSFT.O) shares rose 1.8% to $401.14 in early trading on Monday, outperforming a softer start for U.S. stocks. The S&P 500 slipped 0.2% at the open and the Nasdaq fell 0.3%.
The move came after Stifel analyst Brad Reback cut Microsoft to Hold from Buy and slashed his price target to $392 from $540, calling 2027 expectations “too optimistic.” Reback said it was “time for a break,” pointing to cloud supply constraints, heavier investment and tougher competition in AI. Investing.com
Why it matters now: the software trade has turned jumpy as investors debate whether fast-improving AI tools will help incumbents — or undercut the economics of subscription software. A global selloff in software shares last week was sparked in part by worries over new AI tools, including a legal product built on Anthropic’s Claude model, Reuters reported.
Microsoft also faced fresh questions about cloud reliability after a weekend Azure service issue. The company said an “unexpected interruption” to utility power at one of its West US data centers caused intermittent unavailability, timeouts and latency across a list of Azure services before service health was restored. azure.status.microsoft
Reback argued that Azure’s capacity limits could make it harder to deliver near-term acceleration, even as Microsoft keeps spending to expand data-center footprint. He flagged Alphabet’s Google Cloud as a tightening rival and pointed to momentum from Anthropic in the AI stack.
Capital expenditure, or capex, is money spent on long-lived assets such as data centers, chips and networking gear. More of it can weigh on margins and earnings growth, especially if pricing or cloud growth does not keep pace.
But there are two ways this can break against Microsoft. Persistent capacity issues or more service disruptions could prompt customers to spread workloads across multiple clouds, while a step-up in AI spending without a clear payoff would keep pressure on profitability and valuation.
Investors are now looking to macro data to set the tone for the week. The Labor Department’s delayed January Employment Situation report is scheduled for Wednesday, Feb. 11, followed by the January consumer price index on Friday, Feb. 13, both at 8:30 a.m. Eastern, according to the BLS calendar.
