New York, Jan 5, 2026, 09:36 EST — Regular session
- Microsoft shares fell about 2% in early trading, lagging several megacap tech peers.
- Investors weighed fresh warnings that the AI data-center buildout could add to inflation and keep rates higher for longer.
- Traders are watching U.S. ISM data due later Monday and next week’s CPI report for the next rates signal.
Microsoft Corp shares fell 2.2% to $472.94 in early trading on Monday, extending a shaky start to 2026 for the software heavyweight. The stock trades at about 37 times earnings, leaving little room for disappointment if rate expectations shift again.
The drop put Microsoft among early drags in big tech as investors re-tested the “AI trade” that powered much of last year’s gains. The concern now is less about demand and more about the price tag.
A Reuters report on Monday flagged a growing worry among money managers: the AI boom itself could help keep inflation sticky by driving a surge in data-center construction and power demand. “You need a pin that pricks the bubble and it will probably come through tighter money,” Trevor Greetham, head of multi-asset at Royal London Asset Management, told Reuters. Reuters
Mega-cap tech was mixed. Nvidia rose 1.2% and Alphabet gained 0.7%, while Meta Platforms fell 1.4%, Amazon.com slid 1.9% and Apple eased 0.3%, market data showed.
Microsoft also drew attention over the weekend after Chief Executive Satya Nadella launched a personal blog and wrote about moving beyond what he called the “AI slop” debate toward proving practical value, The Verge reported. The Verge
For equity traders, the near-term transmission mechanism is straightforward: higher inflation can mean higher bond yields, which typically pressures high-multiple stocks by reducing the value investors assign to future profits. That matters for Microsoft because its valuation is closely tied to expectations for cloud growth and AI-related sales.
Analysts cited in the Reuters report warned that costs tied to chips and power could keep rising as hyperscalers scale capacity, raising the stakes for margins and free cash flow. A sharper move higher in yields would likely widen the selloff in AI-linked shares, even without new company-specific headlines. Reuters
Microsoft has not announced the date for its fiscal second-quarter results, and its investor FAQ lists the quarter as “TBA.” Traders typically treat any update on timing as a marker for when guidance on Azure demand and capital spending will hit the tape. Microsoft
Next up is a run of U.S. data that could reset rate expectations: the ISM manufacturing and services reports are due at 10:00 a.m. ET on Monday, while the U.S. Consumer Price Index for December is scheduled for Jan. 13 at 8:30 a.m. ET. Marketwatch
