Microsoft Falls 5% Despite Q3 Beat: Why $190 Billion in AI Spending Has Investors Worried
Microsoft's shares dropped 5% despite a Q3 revenue beat, with investors questioning the return on the company's $190 billion AI capital expenditure pledge for 2026. The company's AI business hit a $37 billion annualized run rate, up 123% YoY, while Azure grew 39% ex-foreign-exchange.
Microsoft's Q3 revenue reached $82.89 billion, up 18% year over year, with earnings per share of $4.27. The AI business achieved a $37 billion annualized run rate, a 123% increase YoY. Despite this, shares fell 5% due to concerns over Microsoft's $190 billion AI capital expenditure pledge for 2026. The company's Azure grew 39% ex-foreign-exchange, beating expectations. Investors are questioning the return on investment for Microsoft's AI spending, with some comparing it unfavorably to peers like Alphabet, whose Google Cloud revenue grew 63% to $20.03 billion.
This content was automatically generated and/or translated by AI. It may contain inaccuracies. Please refer to the original sources for verification.