NASDAQ: MSFT
Key Data Points
Microsoft (MSFT 10.23%), which develops software, services, devices, and solutions worldwide, closed Thursday at $433.50, down 9.99%. Shares declined after earnings and AI capital expenditure updates led investors to focus on slowing Azure cloud growth.
Trading volume reached 126.5 million shares, about 366% above its three-month average of 27.1 million shares. Microsoft IPO'd in 1986 and has grown 445,782% since going public.
How the markets moved today
The S&P 500 dipped 0.17% to 6,966, while the Nasdaq Composite fell 0.72% to 23,685 as large-cap tech weighed on software-heavy benchmarks. Among software industry peers, Apple closed at $258.01, up 0.61%, and Alphabet finished at $338.25, gaining 0.67%, both showing more resilient reactions than Microsoft.
What this means for investors
Despite growing sales and earnings per share by 17% and 24% during the second quarter -- easily surpassing Wall Street’s expectations -- Microsoft stock sold off 10% today. While the company’s Intelligent Cloud unit continued to see accelerating growth at 29% in Q2, the market seemed more focused on the fact that Microsoft’s capex jumped 89% year over year from Q2 2025.
Now trading at 26 times forward earnings, I’d argue this sell-off is a bit extreme given the company’s persistent sales growth and even stronger EPS growth. That said, management admitted two-thirds of its Q2 capex was dedicated to “short-lived” assets like CPUs and GPUs, so the market will want to start to see (or maybe even already wanted to see) a higher ROI from the company’s massive capex outlays.
