Microsoft Shares Plunge Amid AI Investment Concerns

Staff Report: PNN

U.S.-based tech giant Microsoft has seen a significant drop in its share price. Amid pressures across the software sector, the company’s stock fell nearly 12% on Thursday, creating concern among investors over whether its massive artificial intelligence (AI) investments will deliver the expected returns.

The Redmond-based company lost approximately $400 billion in market value in a single day, marking the worst day for Microsoft since March 2020.

According to the recently released financial report, growth in the company’s cloud service, Azure, has slowed compared to previous periods, while expenses have risen sharply. In the second quarter of the current fiscal year, Microsoft’s capital expenditure increased 66% from the same period last year, reaching a record $37.5 billion. A significant portion of this spending is going toward AI infrastructure and data center expansion.

Microsoft has forecast that from January to March, Azure growth will stabilize between 37-38%. However, growth slowed slightly at the end of 2025, partly due to AI chip supply constraints.

Market analysts suggest that investors were expecting signals of reduced spending and faster revenue growth from AI, but the reality disappointed.

Concerns have also grown around Microsoft’s close partner OpenAI. Approximately 45% of the company’s cloud order pipeline is related to OpenAI, increasing potential risks. Reports note that OpenAI is under heavy debt pressure and could face funding shortages within the next 18 months.

While Microsoft’s leadership in AI remains strong, experts warn that over-investment and reliance on specific partners could pose future risks, prompting caution alongside enthusiasm in the tech sector