Microsoft Stock Plunges 10.5% as Azure Growth Slows Despite Record AI Spending

Summary

Microsoft's stock suffered a historic 10.5% plunge on January 29, 2026 — erasing approximately $375 billion in market capitalization — after reporting Q2 FY2026 earnings the previous evening. While headline numbers beat expectations (revenue of $81.3B, up 17% YoY, vs. $80.3B consensus; EPS of $4.14 vs. $3.91 expected), investors focused on two alarming signals: Azure growth decelerated from 40% to 39%, and CFO Amy Hood guided further softening to 37-38% next quarter, while capital expenditures s