Why Jan. 28 Was a Historic Day for Microsoft for All the Wrong Reasons

Core Viewpoint - Microsoft has experienced a significant stock price drop of 12% shortly after trading began on January 29, marking one of the worst single-day declines in its history, indicating a reset in investor expectations [1] Financial Performance - Microsoft reported earnings on January 28, with revenue of $81.3 billion, exceeding expectations by $1.1 billion, and earnings per share (EPS) of $4.14, which was $0.22 above expectations [2] - The company spent $37.5 billion on capital expenditures in the latest quarter, a 66% increase from the previous year, primarily for artificial intelligence infrastructure and data centers [3] Growth Concerns - Azure's revenue grew by 39% year over year, but growth is expected to slow due to physical capacity limitations in meeting demand [4] - Investors are becoming impatient regarding the timeline for returns on Microsoft's significant investments, raising concerns about the impact on profit margins [3]