Microsoft shares plummeted almost a 12% after the presentation of financial results corresponding to the second fiscal quarter of 2026. This is the second largest daily drop in its history and the first taking into account its value: $440 billion loss in market capitalization.
The investors They are increasingly skeptical about Microsoft’s strategy in artificial intelligence. This skepticism extends to other large technology companies as a greater number of analysts continue to warn of the AI bubble. Not because of the revolution that these technologies may bring in the future, but because of the excessive acceleration of their control that many describe as unsustainable.
Microsoft shares fell 11.9% to $424.15, the largest intraday loss for the stock since March 16, 2020. Typically insatiable investors were especially punished when revenue from its cloud computing unit did not grow at the pace expected.
Under “normal” market conditions, Microsoft’s results would have been remarkable. Quarterly revenue of $81.27 billion and earnings per share of $4.14 beat Wall Street estimates of $80.3 billion and $3.91 EPS. But we are not in standard market conditions.
Although revenue from its Azure unit rose 39% year-over-year, it was slightly slower than what it reported the previous quarter. Additionally, the company reported $29.8 billion in capital expenditure for the quarter, well above the projected $23.4 billion. This increase in capital expenditures, directly related to investments in AI, is “one of the main problems”said Morgan Stanley analyst Keith Weiss.
The AI bubble?
Doubts, many doubts. Although the global income of the AI giants continues to rise, the different reports that are arriving regarding the real results and the future of AI are quite contradictory, depending on who issues them. Let’s not talk about the overvaluation of its usefulness, questioned even by the CEO of Microsoft and which at the user level is a constant, even negative, as we saw in the announcement of AI agents in Windows.
Analyzing Microsoft’s results, we see that capital expenditures have skyrocketed to almost $40 billion during the quarter, in a year-on-year increase around 70%. Much of the value has been invested in infrastructure, especially NVIDIA accelerators, which may have a considerable lifespan in your gaming PC, but depreciate incredibly quickly as part of a huge data center cluster. Investors are basically concerned that Microsoft will not see a significant return on this silicon investment before the infrastructure needs to be upgraded or replaced.
Investors are also concerned about the Microsoft’s overdependence on OpenAI. The star AI firm, but it has become a money-burning machine on an industrial scale. OpenAI is reportedly seeking tens of billions in new investments, up to $500 billion in the Stargate project alone, with an eye on NVIDIA, Amazon and Microsoft, to avoid the collapse some critics are talking about.
AI bubble? Flight forward? Prick? We will have to wait, but the investors’ notice to Microsoft has been forceful. Artificial intelligence technologies are widely overrated and have yet to demonstrate their benefits in all areas.
