Microsoft Shares Drop 6.2% After Weak Guidance and Slow Azure Growth
Microsoft’s stock plummeted 6.2% after the company issued weak guidance for the current quarter, citing a revenue range of $67.7 billion to $68.7 billion, falling short of Wall Street’s expectations. The decline came despite the software giant’s fiscal second-quarter earnings beating analyst forecasts, with earnings per share of $3.23 on $69.63 billion in revenue.
The company’s Azure and other cloud services revenues slowed down, growing 31% year over year, down from 33% in the previous quarter. Many Wall Street analysts remained optimistic about Microsoft’s prospects, citing its strong position in the artificial intelligence market and ability to drive growth through its Cloud business.
Microsoft CEO Satya Nadella said during the earnings call that the company’s Azure AI Foundry will offer DeepSeek’s R1 model, an open-source AI model, which is currently available on GitHub. The model will also be accessible on Copilot+ PCs in the future.
Despite the disappointing guidance, Microsoft’s stock has been resilient, with many analysts standing by the company’s prospects. Goldman Sachs analyst Kash Rangan called Microsoft “well-positioned” to benefit from artificial intelligence adoption, while Bernstein’s Mark Moerdler urged management to focus on the core Azure business independent of AI.
The company’s shares have dropped 1.5% since the start of 2025, but some technology stocks saw strong gains on Thursday, with Meta Platforms jumping nearly 4% and IBM popping 14% on robust results.
