Microsoft (MSFT) Loses 10% Amid Heavy Spending

Core Viewpoint - Microsoft Corp. experienced a significant drop in share prices, attributed to profit-taking and concerns over heavy spending and exposure to OpenAI [1] Financial Performance - In the second quarter ending December 31, 2025, Microsoft reported a net income increase of 59.5% to $38.46 billion from $24.1 billion year-on-year [2] - Revenues grew by 17% to $81.3 billion from $69.6 billion in the same period last year [2] - Cloud revenues surged by 26% to $51.5 billion [2] Capital Expenditures and Backlog - Capital expenditures rose significantly by 66% to $37.5 billion, raising concerns among analysts [3] - OpenAI constitutes 45% of Microsoft's backlog, leading to questions about the financial viability of achieving projected goals [4] Analyst Concerns - Jefferies analyst Brent Thill expressed concerns regarding Microsoft's exposure to OpenAI and the implications of its backlog on financial performance [4]