Microsoft (NASDAQ: MSFT) experienced a significant drop of nearly 10% on January 29, 2026, following its fiscal second-quarter earnings report, which revealed a revenue increase of 17% year-over-year to $81.3 billion. The company also reported earnings per share (EPS) of $4.41, exceeding estimates by $0.22. However, investor concerns centered around a $37.5 billion capital expenditure and anticipated slower growth in its Azure cloud platform, which saw a 39% year-over-year increase but is projected to slow down in the upcoming quarter.
Despite the stock’s decline, analysts suggest it may present a buying opportunity, as it now trades at approximately 26.2 times projected earnings for the next 12 months, below historical averages. While Azure’s revenue growth is expected to be between 37% and 38% for the next quarter, Microsoft’s long-term investment strategy in AI and cloud services remains a point of confidence for many investors.
