Microsoft (MSFT) Is Down 14.4% After AI Capex Surges Despite Strong Q2 Results And Backlog Growth – Has The Bull Case Changed?
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In late January 2026, Microsoft reported fiscal Q2 results showing revenue of US$81.27 billion and net income of US$38.46 billion, alongside a very large 66% increase in capital expenditures to US$37.50 billion largely for AI chips and data centers. While Microsoft’s commercial backlog more than doubled to US$625 billion, with about 45% tied to OpenAI, investors focused on the tension between this concentrated AI-driven pipeline and the heavy upfront spending required to support it. We’ll...
📄 Summary
In late January 2026, Microsoft reported fiscal Q2 results showing revenue of US$81.27 billion and net income of US$38.46 billion, alongside a very large 66% increase in capital expenditures to US$37.50 billion largely for AI chips and data centers. While Microsoft’s commercial backlog more than doubled to US$625 billion, with about 45% tied to OpenAI, investors focused on the tension between this concentrated AI-driven pipeline and the heavy upfront spending required to support it. We’ll...