Microsoft Hit with Lawsuit After $357B Market-Value Loss, Azure Slowdown
MSFT•Microsoft faces a shareholder lawsuit after executives allegedly hid Azure’s slowdown, which sparked a 10% stock drop erasing $357 billion in market value. The complaint cites Azure growth slowing from 40% to 39% and a 66% rise in capital expenditures to $37.5 billion for AI initiatives.
1. Lawsuit Filed Over Alleged Misleading Disclosures
On June 12, a Michigan police and fire pension fund filed a class-action lawsuit in Seattle federal court, accusing Microsoft executives of concealing a slowdown in Azure growth while aggressively promoting AI spending.
2. Azure Growth Deceleration
The complaint highlights Azure revenue growth slowing from 40% in the previous quarter to 39%, attributed to capacity limits as GPUs and CPUs were redirected from cloud operations to support AI research.
3. Surge in AI-Related Expenditures
Microsoft’s quarterly capital expenditures jumped 66% year-over-year to $37.5 billion, driven by large-scale investments in AI initiatives such as Copilot and partnerships with AI developers.
