Microsoft's AI Splurge Sparks Class Action as Azure Growth Fails to Convince Investors
Published on 06/20/2026 at 18:42 | Redaktion boerse-global.de
Microsoft’s stock has been punished this year even as the software giant delivers some of the strongest revenue growth in its history. The disconnect is stark: third-quarter revenue climbed 18% to a cloud-driven $54.5 billion, while the shares have tumbled roughly 18% since January. At Friday’s close of €332.00, the stock now sits nearly 30% below its 52-week high — a far cry from the optimism that defined much of 2024.
A fresh legal challenge is adding to the pressure. A class-action lawsuit filed in Seattle alleges that Microsoft concealed a slowdown in Azure growth and failed to properly disclose the soaring infrastructure costs tied to its artificial intelligence push. The complaint specifically targets the company’s second fiscal quarter, when Azure’s expansion eased to 39% and capital expenditure hit $37.5 billion. Microsoft has dismissed the claims as groundless.
The irony is that Azure has since rebounded. In the third quarter, the cloud platform grew 40%, and the AI business alone reached an annualized revenue run rate of $37 billion — double the prior year’s figure. But the capital intensity of that expansion is weighing on margins. Cloud gross margin slipped to 66%, and cash spending on property and equipment totaled $31 billion in the March quarter alone.
Should investors sell immediately? Or is it worth buying Microsoft?
Analysts remain broadly upbeat. None of the 47 Wall Street experts covering Microsoft recommend selling, and the average price target hovers around $560-$561. Even the newly declared quarterly dividend of $0.91 — payable in September — has done little to arrest the stock's slide, suggesting income-seeking investors are wary of the near-term outlook.
Technically, the chart paints a grim picture. The stock has fallen decisively below its 200-day moving average, which now sits near €387. With the relative strength index at 37.8, selling pressure is persistent but not yet extreme. The 50-day average at roughly €354 represents the first hurdle for any recovery; a close above that level would begin to signal a change in sentiment.
For now, all eyes are on the next support level at the 52-week low of €309.35. A break below that floor could open the door to further losses. Until the market sees evidence that Microsoft’s AI investments are translating into fatter margins rather than fatter cost lines, the stock may struggle to regain its footing.
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