Key Stats for Microsoft Stock
- Price Change for Microsoft stock: -4%
- Current Share Price as of Oct. 29: 542
- 52-Week High: $555
- $MSFT Stock Price Target: $621
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What Happened?
Microsoft (MSFT) stock dropped nearly 4% despite reporting strong fiscal first-quarter results that beat Wall Street expectations. The company posted earnings per share of $3.72 versus the expected $3.66, while revenue came in at $77.67 billion, topping estimates of $75.39 billion.
CFO Amy Hood announced that capital expenditure growth will accelerate this fiscal year, reversing her previous guidance that spending growth would slow.
MSFT spent $34.9 billion on infrastructure in just fiscal Q1, and that number is set to climb even higher.
Microsoft’s Azure cloud business was the star performer, with revenue rising 40% year-over-year. The Intelligent Cloud segment brought in $30.9 billion, beating the $30.25 billion consensus.
Azure’s growth outpaced analyst expectations of 38.2% expansion, showing strong demand for the company’s AI-powered cloud services.
However, MSFT stock investors are weighing these impressive results against the reality of massive infrastructure spending.
The tech giant is racing to build out data centers and computing capacity to meet surging AI demand, and those investments are eating into near-term profits.
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What the Market Is Telling Us About MSFT Stock
The market’s reaction to MSFT stock suggests investors are concerned about Microsoft’s spending trajectory, even as the business continues to generate substantial revenue growth.
Earlier this year, Microsoft experienced a significant outage affecting Azure and Microsoft 365 services. Various websites and games went down for hours, though the company said it expected full recovery by evening.
During the earnings call, Microsoft disclosed that its investment in OpenAI resulted in a $3.1 billion hit to net income this quarter—equivalent to $0.41 per share.
While the long-term partnership looks promising (Microsoft now holds a 27% stake in OpenAI, valued at roughly $135 billion), these near-term accounting impacts are substantial.
Looking ahead, Microsoft guided for fiscal second-quarter revenue between $79.5 billion and $80.6 billion, with Azure growth expected at 37% in constant currency.
Both figures are roughly in line with analyst expectations, suggesting the business momentum remains solid despite the heavy spending.
For MSFT stock investors, the key question is whether Microsoft’s aggressive infrastructure buildout will pay off in sustained AI-driven revenue growth—or if the company is overbuilding for current demand.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
