Key Takeaways Microsoft shares slumped Thursday, despite quarterly revenue and earnings that topped estimates.Analysts said the tech giant's growing AI spending, weaker-than-expected cloud growth, and reliance on a few large customers raised concerns.

Microsoft beat earnings, but shares fell as Azure growth slowed, margins tightened and nearly half of its backlog relied on OpenAI, raising concerns about future performance.

Microsoft's commercial backlog more than doubled year over year, pointing to enormous demand for AI.

Microsoft stock under pressure: what recent returns say about sentiment Microsoft (MSFT) has recently seen softer share performance, with the stock showing a 1-day return of a 1.10% decline, a past-week return of a 3.

Microsoft lost $400bn in hours as investors panicked over AI costs, cloud growth fears and a brutal market reality check.

With MSFT's 5-year expected CAGR return falling well short of TQI's investment hurdle rate of 10% for low volatility, secular growth compounders and the S&P 500's ( SPY) long-term average return of ~8-10%, I continue to view Microsoft as a "Neutral/Hold" in the low-$500s post Q1 FY2026 earnings.

Keithen Drury has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Microsoft stock jumps 4% as Benzinga data shows mixed valuation but strong growth, profits and balance sheet strength.