Microsoft Stock Plummets 12% Despite Strong Earnings Report
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 03 2026
0mins
Should l Buy MSFT?
Source: Fool
- Earnings Beat Expectations: Microsoft reported earnings that exceeded expectations, with revenue rising 17% to $81.3 billion and net income soaring 60% to $38.5 billion, translating to $5.16 per share, significantly above the anticipated $3.92, yet the stock fell over 12%.
- Cloud Business Milestone: The company's cloud computing segment surpassed $50 billion in revenue for the first time, marking a 26% year-over-year increase, while its intelligent cloud revenue grew 29% to $32.9 billion, with Azure, the main growth driver, seeing a 39% revenue increase this quarter.
- Investor Concerns: Despite strong performance, Azure's growth rate slightly declined from 40% last quarter to 39%, coupled with a projected growth rate of 37% to 38% for the next quarter, raising investor concerns about future growth; additionally, capital expenditures reached a record $37.5 billion, up 66% year-over-year.
- Analysts Remain Bullish: Despite the stock's decline, analysts maintain a positive outlook, with 97% rating Microsoft as a buy, projecting a price target of $600 to $650 per share over the next 12 months, indicating a potential return of 41% to 47%, highlighting Microsoft's attractiveness among the
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 369.370
Low
500.00
Averages
631.36
High
678.00
Current: 369.370
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company that develops and supports software, services, devices, and solutions. Its Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. It comprises Microsoft 365 Commercial products and cloud services; Microsoft 365 Consumer products and cloud services; LinkedIn, and Dynamics products and cloud services. The Intelligent Cloud segment consists of its public, private, and hybrid server products and cloud services. It comprises server products and cloud services, including Azure, and enterprise and partner services, including Enterprise Support Services. Its More Personal Computing segment primarily comprises Windows and Devices, including Windows OEM licensing; Gaming, including Xbox hardware and Xbox content; Search and news advertising, comprising Bing and Copilot, Microsoft News, and Microsoft Edge.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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