Microsoft stock price drops 2.13%, market worries about slowing cloud service growth and surge in capital expenditure

2026-02-20 13:47:20

The stock of Microsoft experienced a decline on February 11, 2026, dropping by 2.13% in a single day to close at $404.45. This decline was mainly related to ongoing market concerns about the company’s recent financial performance and capital expenditure strategies.

Performance and Operating Results

Despite Microsoft achieving an unexpectedly strong second quarter of fiscal year 2026 with revenue of $81.3 billion (up 17% year-over-year) and earnings per share of $4.14, the capital markets reacted negatively. The core concerns centered on a slight slowdown in Azure cloud service growth (this quarter’s fixed exchange rate growth was 39%, slightly down from 40% in the previous quarter) and a surge in capital expenditures (CapEx) to $37.5 billion, significantly exceeding market expectations. Investors are worried that short-term AI investments may erode profit margins.

Industry Sector Situation

Additionally, market sentiment was influenced by macroeconomic factors. In early 2026, the entire software sector experienced a sharp correction due to fears that AI technology would disrupt traditional business models, with the iShares Expanded Technology Software Sector ETF (IGV) dropping as much as 18% at the start of the year. This sector-wide capital outflow also put pressure on Microsoft’s stock price.

The above content is based on publicly available information and does not constitute investment advice.

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