Microsoft's stock fell after reporting strong earnings, as slowing Azure growth and rising costs raised concerns about AI-driven profit sustainability.

Microsoft's stock dropped over 5% in after-hours trading on January 28, 2026, despite reporting stronger-than-expected earnings and record cloud revenue, with Azure growth slowing to 39% from 40% in the prior quarter. The company's $625 billion in remaining performance obligations, largely driven by commitments from OpenAI and Anthropic, fueled investor concern over rising capital expenditures—up 66% to $37.5 billion—despite a 29% revenue increase in the Intelligent Cloud segment. While commercial bookings surged 230%, gross margins narrowed to 68%, and analysts questioned the sustainability of AI-driven growth amid intensifying competition from Google and Anthropic.