In this article, Microsoft shares fell by 6.2% following the release of a weak current-quarter guidance after the market closed on Wednesday. The software company exceeded Wall Street’s fiscal second-quarter expectations, reporting earnings of $3.23 per share on revenue of $69.63 billion. This surpassed analysts’ forecast of earnings per share of $3.11 and revenue of $68.78 billion. The stock experienced its worst day since October 2022.
The decline occurred as Microsoft’s finance chief, Amy Hood, stated that the company anticipates revenues for the current quarter to be in the range of $67.7 billion to $68.7 billion, falling short of the $69.78 billion expected by analysts. Revenue increased by 12.3% year over year, marking the slowest growth since mid-2023.
Microsoft also reported a slowdown in the growth of its Azure and other cloud services revenues, with the segment increasing by 31%, down from 33% in the previous quarter. Despite the disappointing guidance and Azure slowdown, many Wall Street analysts remained supportive of the tech giant. Goldman Sachs analyst Kash Rangan described the company as “well-positioned” to benefit from artificial intelligence adoption and as one of the “most compelling investment opportunities” in the industry.
Bernstein’s Mark Moerdler highlighted Microsoft’s ability to drive a Cloud business and the largest AI business, emphasizing the need for management to focus on the core Azure business independently of AI.
Microsoft shares declined by 2% during Monday’s trading session amid a broader sell-off in the tech sector. The drop coincided with Wall Street’s evaluation of the impact of DeepSeek’s AI models, which reportedly trained its open-source model at a lower cost compared to other U.S. products.
During the earnings call, Microsoft CEO Satya Nadella mentioned that DeepSeek’s R1 model is currently accessible through GitHub and the company’s Azure AI Foundry, with plans for availability on Copilot+ PCs in the future.
On Thursday, other technology stocks saw significant gains driven by strong earnings. Meta Platforms surged by nearly 4%, while Tesla saw a slight increase despite missing estimates and reporting a decline in automotive revenue. IBM’s stock rose by 14% due to robust results and notable growth in its software business amid increasing demand for AI.
Since the beginning of 2025, Microsoft’s stock has decreased by 1.5%.
