Microsoft Shares Slide 19% YTD Below $400 on OpenAI Deal Worries
Microsoft shares have dropped 19% YTD, sliding below $400 as a potential $50B OpenAI cloud deal with Amazon risks diverting AI workloads from Azure. Q2 revenue was $81.3B with net income up 23%, driven by $50B+ cloud sales and 15M Copilot seats, but heavy AI capex is squeezing margins.
1. Year-to-Date Performance
Microsoft’s shares have slid 19% year-to-date and are trading below $400 as investors weigh the impact of shifting AI cloud partnerships.
2. Strong Q2 Financials
In Q2, Microsoft posted $81.3 billion in revenue and 23% net income growth, underpinned by more than $50 billion in cloud sales and 15 million Copilot seats.
3. AI Cloud Deal and Capex Pressure
Concerns that OpenAI may allocate up to $50 billion of cloud workloads to Amazon are heightening competition for Azure, while substantial AI infrastructure expenditure continues to pressure margins and free cash flow.