By Tobias Mann
Publication Date: 2026-01-29 02:37:00
What should have been a banner second quarter for Microsoft was met with tepid apprehension on Wall Street on Wednesday, sending its share price down by 6 percent in after-hours trading.
It could have been a celebratory quarter, as Redmond saw profits surge 60 percent year over over (YoY) to $38.5 billion on revenues of $81.3 billion. But in question after question, analysts politely pressed CEO Satya Nadella and CFO Amy Hood for assurances that Microsoft’s lopsided reliance on AI model makers – and the massive capital expenditures required to serve them – wasn’t going to come back to haunt the cloud giant.
Of particular concern was the fact that 45 percent of Microsoft’s $625 billion backlog was directly attributable to OpenAI.
As part of OpenAI’s restructuring as a public benefit corporation last fall, Microsoft revealed OpenAI had contracted to purchase an incremental $250 billion in Azure services. In…
