Why did Microsoft shares drop by $360 billion?

Microsoft shares dropped significantly due to concerns about slowing cloud sales and delayed returns on its substantial AI investments, leading to a 10% stock price decrease and a $360 billion loss in market capitalization.

What is Microsoft's capital expenditure during the quarter?

Microsoft's capital expenditure surged by 66% during the quarter, reaching $37.5 billion.

What are the concerns regarding Microsoft's AI investments?

Investors are concerned about the potential for Microsoft to achieve a strong return on investment from its massive AI investments and the current slowdown in its cloud business growth.

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Microsoft's $360B Plunge: AI Hopes Dim?

30 Jan

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Summary

Microsoft shares dropped 10%, losing $360 billion in market cap.
The stock's largest single-day fall occurred since March 2020.
Concerns over slowing cloud sales and AI investment returns emerged.

Microsoft experienced a severe market downturn on Thursday, with its stock price plummeting by 10%. This significant sell-off resulted in a loss of approximately $360 billion in market capitalization, representing the company's worst single-day performance since March 2020.

The sharp decline was attributed to concerns arising from the company's latest quarterly earnings report. Investors expressed worries about a slowdown in the growth of Microsoft's cloud business and a perceived delay in realizing returns from its considerable investments in artificial intelligence.

Analysts noted that Microsoft's capital expenditures surged by 66% to $37.5 billion during the quarter. Simultaneously, the growth rate of its Azure cloud service showed a deceleration compared to the previous quarter, intensifying investor apprehension.

Market strategists suggested that if Microsoft does not achieve a strong return on investment from its AI initiatives, its shares may need to be revalued to align with historical fair value. The total market capitalization lost by Microsoft on Thursday was the second-highest on record for a single trading session on Wall Street.

Disclaimer: This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.