Microsoft shares plunge as Wall Street questions AI investments

The decline is due to stagnant growth in its cloud computing software as OpenAI investments are questioned.

Microsoft shares have plunged 12 percent amid a sell-off in the software industry, fueling fears that heavy investments in artificial intelligence will pay off across the industry.

The Redmond, Washington-based tech giant is on track to have its worst day since March 2020 on Thursday, suffering a valuation loss of around $400 billion.

On Wednesday, the company reported a slowdown in growth of its cloud computing product Azure in its earnings report. Capital spending increased 66 percent in the second quarter compared to the same period last year, reaching a record $37.5 billion for the quarter.

Meanwhile, Microsoft forecast Azure growth will remain steady at 37 percent to 38 percent in the January-March period after slowing in recent years.