MICROSOFT (MSFT) Company Report

Stifel downgraded Microsoft from Buy to Hold and cut its price target to $392 (from $540), driving shares down ~5% to $392.74.
Analyst Brad Reback cited Azure capacity constraints, rising Google cloud/AI competition, and Anthropic momentum, warning that fiscal and calendar 2027 expectations are too optimistic.
The firm raised its fiscal 2027 capital-expenditure forecast to $200 billion (vs. Street’s ~$160 billion) and trimmed its gross-margin outlook to 63%, flagging potential margin pressure from AI spending.
Microsoft still beat fiscal Q2 estimates with $81.27 billion in revenue (consensus $80.31 billion) and $4.14 adjusted EPS (consensus $3.92), but market reaction was muted.
The downgrade sparked a broader software stock selloff: the S&P 500 software & services index fell 3.1% and has shed roughly $1 trillion in market value since Jan. 28.

1 day ago

Bloomberg

Microsoft appoints Hayete Gallot as security chief

MSFT

Management Change

Hiring

Hayete Gallot, formerly leading customer experience at Google Cloud, has been named Executive Vice President for Security, succeeding Charlie Bell.
Gallot will oversee Microsoft’s entire security portfolio under the newly launched Secure Future Initiative, aimed at overhauling an “inadequate” security culture following a 2024 internal review.
Charlie Bell will move into an individual-contributor role focused on engineering quality, reporting directly to CEO Satya Nadella.
The leadership changes occur after Microsoft’s share price fell about 14% year-to-date amid investor concerns over Azure growth and the AI-driven software outlook.

2 days ago

Bloomberg

Microsoft expands OT cybersecurity collaboration with Dragos

MSFT

Product Launch

New Projects/Investments

Microsoft and Dragos expand collaboration to integrate the Dragos Platform natively with Azure, Sentinel, and Marketplace, enabling unified IT/OT security operations at global industrial scale
Beginning Q1 2026, the Dragos Platform will support SaaS deployments on Azure in addition to on-premises and hybrid models, enhancing deployment flexibility
Integration offers customers improved industrial asset visibility, sector-aware threat detection, and reduced procurement friction via Microsoft Marketplace and Azure consumption commitments
The global OT security market is projected to grow from $23.5 billion in 2025 to $50.3 billion by 2030, underscoring the strategic importance of securing cyber-physical operations

3 days ago

Press Release

Microsoft signs $750M cloud deal with Perplexity

MSFT

New Projects/Investments

Microsoft has inked a three-year, $750 million agreement to power Perplexity’s AI models on its Azure Foundry platform.
The deal grants Perplexity access to OpenAI, Anthropic and xAI systems, aligning with its deliberate multi-cloud strategy while maintaining AWS as its primary provider.
The partnership is designed to strengthen Azure’s positioning versus AWS and Google by showcasing Foundry as a hub for multi-vendor model deployment.
The announcement came amid investor concerns over weaker-than-expected Azure growth and softer margin guidance, which had driven shares down about 10%; analysts still rate Microsoft a Strong Buy with a $603.95 average price target.

Jan 29, 2026, 10:45 PM

Bloomberg

Microsoft stock falls amid software sector selloff

MSFT

Earnings

Demand Weakening

Software stocks plunged this earnings season, dragging down Microsoft as investors worry heavy AI spending may threaten long-term earnings.
Microsoft’s Azure grew 38% YoY in the December quarter on a constant-currency basis, but its growth pace did not accelerate, disappointing investors.
The S&P 500 Software & Services index fell over 20% in a 63-session stretch, its worst slump since June 2000, while semiconductor stocks rallied on AI hardware demand.
Analysts raised Meta price targets, citing strong AI-enhanced ad revenue but warning of higher AI-driven expenses.

Jan 29, 2026, 4:58 PM

Morningstar

Microsoft reports strong quarter, stock plunges on AI spending

MSFT

Earnings

New Projects/Investments

Revenue of $81.3 billion and EPS of $4.14 beat consensus ($80.28 billion revenue; $3.86 EPS)
Net income rose ~60% to $38.5 billion, while cloud revenue grew ~38–39% and reached $50 billion for the first time
AI-related capex jumped ~66% to $37.5 billion, raising concerns over heavy AI spending and deep ties to OpenAI (27% stake; 45% of cloud commitments)
Stock plunged as much as 12% intraday, its largest drop since 2020, amid worries over Azure growth deceleration and AI capex
Management framed AI as a long-term growth driver, with guidance and capacity allocation centered on AI and cloud expansion

Jan 29, 2026, 3:04 PM

Barron's

Cyclic Materials expands U.S. rare earth recycling footprint

MSFT

New Projects/Investments

$82 million investment to build a new recycling campus in McBee, South Carolina, combining a Spoke and the company’s largest Hub facility (600 t/yr Mixed Rare Earth Oxides capacity, expandable to 1,800 t/yr)
Facility will process 2,000 t of magnet material annually (scalable to 6,000 t) using proprietary MagCycle™ and REEPure™ technologies to onshore heavy rare earth production
Entered a 10-year exclusive agreement with VACUUMSCHMELZE to recycle 100% of magnet swarf from VAC’s new Sumter, SC plant
Campus operations slated to begin in 2028, creating over 90 skilled jobs and supported by federal and state incentives

Jan 29, 2026, 1:00 PM

Press Release

Microsoft reports Q2 FY2026 results

MSFT

Earnings

Guidance Update

New Projects/Investments

Microsoft delivered $81.3 billion in revenue, up 17% year-over-year (15% constant currency), with earnings per share of $4.14, up 24% (21% cc).
Microsoft Cloud revenue reached $51.5 billion, growing 26% year-over-year (24% cc) and surpassing $50 billion for the first time.
Commercial bookings rose 230% year-over-year, and remaining performance obligation was $625 billion (up 110% YoY; 2.5-year weighted duration; 45% from OpenAI).
AI adoption accelerated: Microsoft 365 Copilot now has 15 million paid seats (up 160% YoY), and GitHub Copilot has 4.7 million paid subscribers (up 75% YoY).
Capital expenditures totaled $37.5 billion (two-thirds on GPUs/CPUs), with Q3 revenue guidance of $80.65 billion–$81.75 billion and FY26 operating margin expected to increase slightly.

Jan 28, 2026, 10:30 PM

Transcript

Microsoft reports Q2 2026 earnings

MSFT

Earnings

Guidance Update

New Projects/Investments

Revenue of $81.3 billion, up 17% year-over-year; operating income grew 21% and EPS was $4.14, up 24% y/y (adjusted for OpenAI impact).
Microsoft Cloud revenue of $51.5 billion, up 26% y/y; Azure & other cloud services grew 39% y/y; commercial bookings rose 230% y/y, driven by multiyear OpenAI and Anthropic commitments.
Capital expenditures of $37.5 billion (two-thirds on GPUs/CPUs), free cash flow of $5.9 billion, and $12.7 billion returned to shareholders via dividends and buybacks, up 32% y/y.
Q3 guidance: revenue of $80.65 billion–$81.75 billion (15%–17% growth) with Microsoft Cloud gross margin ~65%; ongoing investment in AI compute.
Continued AI and infrastructure investments: support for GPT-5, Copilot expansions; Fabric’s annualized revenue run rate exceeds $2 billion, up 60% y/y with 31,000+ customers.

Jan 28, 2026, 10:30 PM

Transcript

Microsoft reports Q2 2026 earnings

MSFT

Earnings

Guidance Update

New Projects/Investments

Revenue was $81.3 billion, up 17% year-over-year; operating income grew 21% and EPS was $4.14, up 24% (adjusted).
Intelligent Cloud revenue reached $32.9 billion (+29%), with Azure and other cloud services up 39%, while on-premises server products grew 2%.
Microsoft 365 Copilot usage drove record seat adds, with 15 million paid seats (up 160% YoY), daily active users increasing 10×, and average conversations per user doubling YoY.
Added nearly 1 GW of datacenter capacity, brought online Maia 200 and Cobalt 200 AI accelerators, and announced seven new country investments to meet AI infrastructure demand.
Q3 guidance: Intelligent Cloud revenue of $34.1–34.4 billion (+27–29%), More Personal Computing revenue of $12.3–12.8 billion; FY 2026 operating margins are expected to be up slightly.