On Thursday, Microsoft reported a major service disruption affecting Outlook, Teams, Exchange Online, SharePoint Online and OneDrive, with reports of degraded or unavailable service functionality continuing into the evening Pacific Time. Microsoft’s official 365 Status account on X began logging incidents at 11:37 a.m. PT, noting investigation of an infrastructure issue labeled MO1221364. Downdetector recorded over 8,000 outage reports at peak on Thursday afternoon, while the Microsoft Service Health Status page warned that both end users and IT administrators could not access email inboxes, files, meetings or security dashboards in Purview and Defender XDR. As of 7 p.m. PT, no ETA for full restoration had been provided, forcing enterprises worldwide to reroute critical communications and delaying scheduled client meetings.

Jefferies analysts lowered their outlook on Microsoft to Hold ahead of fiscal Q2 earnings, citing rising depreciation expense and a higher capital expenditure guide in the Cloud segment as potential headwinds to margin expansion. The firm highlighted that depreciation increased by 25% year-over-year in the most recent quarter, driven by accelerated investment in data center capacity and AI infrastructure. With guidance for Cloud CapEx rising by 30% from the prior outlook, Jefferies warns the company may deliver a more conservative margin forecast for the next quarter. Since Q3 last year, Microsoft’s share performance has fallen by over 15%, reflecting investor rotation away from tech rather than fundamental deterioration, according to the downgrade note.

Microsoft signed a multi-year agreement with Mercedes-AMG PETRONAS Formula One Team to integrate Azure cloud and AI capabilities across trackside operations, factory simulations and race strategy ahead of sweeping rule changes in 2026. The collaboration aims to deliver real-time performance analysis for a global audience exceeding 800 million fans, optimize vehicle simulations at Mercedes’ Brackley and Brixworth facilities, and leverage AI-driven insights during Grand Prix weekends. With F1 transitioning to greater electrification and sustainability next season, Mercedes will deploy Microsoft’s enterprise AI agents to process telemetry, aerodynamic data and energy deployment plans, targeting a 10% reduction in pit-stop cycle times and improved on-track decision-making efficiency.