By Daniel Foelber
Publication Date: 2026-02-02 22:15:00
Microsoft fell after reporting earnings despite record results.
Last year, I predicted that Microsoft (MSFT 1.52%) would hit an all-time high even after a brutal tariff-induced sell-off in April 2025. Microsoft reached an all-time high of $555.45 per share in late October. But Microsoft is now hovering around an eight-month low, with the stock falling 10.5% after reporting its second-quarter fiscal 2026 earnings on Jan. 28.
Here’s why Microsoft has been under pressure even as the S&P 500 continues to make new all-time highs, and whether the stock can recover in 2026.
Image source: Getty Images.
AI spending is overshadowing Microsoft’s record results
Microsoft’s cloud business is booming — raking in over $50 billion in revenue in its latest quarter. In total, Microsoft’s revenue soared 17%, operating income was up 21%, and adjusted diluted earnings per share (EPS) jumped 24%. It was a blowout quarter for Microsoft, but investors may be concerned about the path to profitability…
