Microsoft (NASDAQ:MSFT), which develops software, services, devices, and solutions worldwide, closed Thursday at $433.50, down 9.99%. Shares declined after earnings and AI capital expenditure updates led investors to focus on slowing Azure cloud growth.
Trading volume reached 126.5 million shares, about 366% above its three-month average of 27.1 million shares. Microsoft IPO’d in 1986 and has grown 445,782% since going public.
The S&P 500 dipped 0.17% to 6,966, while the Nasdaq Composite fell 0.72% to 23,685 as large-cap tech weighed on software-heavy benchmarks. Among software industry peers, Apple closed at $258.01, up 0.61%, and Alphabet finished at $338.25, gaining 0.67%, both showing more resilient reactions than Microsoft.
Despite growing sales and earnings per share by 17% and 24% during the second quarter — easily surpassing Wall Street’s expectations — Microsoft stock sold off 10% today. While the company’s Intelligent Cloud unit continued to see accelerating growth at 29% in Q2, the market seemed more focused on the fact that Microsoft’s capex jumped 89% year over year from Q2 2025.
Now trading at 26 times forward earnings, I’d argue this sell-off is a bit extreme given the company’s persistent sales growth and even stronger EPS growth. That said, management admitted two-thirds of its Q2 capex was dedicated to “short-lived” assets like CPUs and GPUs, so the market will want to start to see (or maybe even already wanted to see) a higher ROI from the company’s massive capex outlays.
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Josh Kohn-Lindquist has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, and Microsoft. The Motley Fool has a disclosure policy.
Stock Market Today, Jan. 29: Microsoft Falls After Azure Growth Slows and AI Spending Raises Investor Concerns was originally published by The Motley Fool