Microsoft Faces AI Repricing as Stock Sheds 22% Following Q2 Results

Overview

• Azure revenue growth slowed to 39% year over year as Microsoft cited data center capacity limits that are holding back customer deployments.
• Customer orders waiting for infrastructure reached $625 billion, with roughly 45% tied to OpenAI (about $281 billion), intensifying concentration risk and drawing new shareholder lawsuits.
• Capital expenditures surged to $37.5 billion in the quarter while company-wide gross margins declined year over year, signaling near-term profitability pressure.
• Enterprise uptake of Microsoft 365 Copilot remains limited at 15 million licenses out of 400 million seats, or about 3.7% penetration.
• Following the selloff, shares trade near $393.58 with a trailing P/E of 26.5 and a market value around $2.9 trillion, reflecting a marked valuation reset.