Microsoft lost $357 billion in market value as weaker cloud growth and cautious guidance disappointed investors, sparking debate over its long-term strategy.
Microsoft shares fell nearly 10% on Thursday, marking the largest daily drop since March 2020 and erasing $357 billion from the company’s market capitalization, which now stands at $3.22 trillion. Analysts cited weaker-than-expected Azure growth and lower fiscal guidance for Windows and other segments. Finance chief Amy Hood said, “If I had taken the GPUs that just came online…allocated them all to Azure, the KPI would have been over 40.”
Experts remain divided on Microsoft’s strategy, with some urging faster data center expansion. Analyst Ben Reitzes said, “They need to literally stand up buildings a little faster.” Others, including Bernstein analysts, defended management, noting the focus on long-term decisions over short-term stock performance. UBS analysts added concerns about Microsoft 365 Copilot, writing, “M365 revs growth is not accelerating…we think Microsoft needs to ‘prove’ that these are good investments.”