By Daniel Foelber
Publication Date: 2026-02-02 17:00:00
Key Points
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Capital expenditures are growing far faster than revenue and earnings.
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Microsoft’s AI bets are bold, but calculated.
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Microsoft can afford to ramp up AI spending without compromising its financial health.
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Last year, I predicted that Microsoft (NASDAQ: MSFT) 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.
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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.
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