Despite CEO Satya Nadella touting strong adoption of Copilot AI assistants, Microsoft's stock dipped as investors express unease over massive capital expenditures and growth concerns in core Azure and 365 businesses.
Microsoft shares tumbled 12% as investors questioned the return on its massive AI investments, despite strong cloud growth. The volatility has created a surge in bullish options activity, presenting strategic opportunities for long-term believers.
Microsoft's second-quarter earnings smashed expectations, fueled by a 26% surge in cloud revenue that crossed the $50 billion mark for the first time. The tech giant's aggressive AI investments are now driving significant growth across its enterprise stack.
Microsoft posts record cloud and AI-driven revenue for Q2, fueled by new partnerships and its custom AI chip. However, a significant surge in capital expenditures for AI infrastructure and a slight deceleration in Azure growth triggered the stock's worst single-day drop since 2020, testing investor resolve on the long-term payoff.
Microsoft shares suffered their steepest single-day drop in over three years after Azure cloud growth narrowly missed estimates, revealing the complex trade-offs between fueling internal AI projects and meeting soaring external demand.
