Microsoft stock plunges 10% as its worst day in years sees a $357 billion market cap wipeout
Along with a brutal day for software stocks, Microsoft's wipeout helped drag down the tech-heavy Nasdaq about 0.7% for the day
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Microsoft $MSFT stock plummeted almost 10% on Thursday, a steep drop the day after the tech giant reported earnings that saw the company shed a whopping $357 billion from its market capitalization.
Shares fell 9.99% on the day. It was the stock's worst day since 2020, CNBC reports. Shares were only up slightly in after-hours trading late Thursday.
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In its earnings release on Wednesday, Microsoft reported doing exactly what Big Tech keeps promising it can do: spend like the future has a delivery deadline and still put up clean numbers. The company keeps proving that demand for cloud and AI services is real, broad, and growing at scale. But investors are worried about how expensive it is to keep that engine running — and how quickly the payoff will show up where it counts.
In its latest quarter, Microsoft posted $81.3 billion in revenue (up 17%) and $4.14 in non-GAAP EPS (up 24%); analysts were looking for about $3.91 in adjusted EPS on roughly $80.3 billion in revenue. Azure growth stayed hot at 39%, essentially matching expectations.
But the stock took a hit anyway, initially sliding more than 7% in after0-hours trading on Wednesday before extending that to its 10% drop during regular trading on Thursday.
Along with a brutal day for software stocks, Microsoft's wipeout helped drag down the tech-heavy Nasdaq $NDAQ about 0.7% for the day.
Microsoft pegged capex around $37.5 billion for the quarter, ahead of what the Street had modeled — and investors are still arguing over whether cloud growth is being constrained by capacity or just cooling toward something more normal. The company’s framing is straightforward: AI is diffusing fast, and Microsoft is already selling the picks, shovels, and the permit office.
“We are only at the beginning phases of AI diffusion, and already Microsoft has built an AI business that is larger than some of our biggest franchises,” Satya Nadella said in the company's earnings release.
—Shannon Carroll contributed to this article.