Microsoft Stock Plummets $360 Billion in One Day: Discover Why
The tech powerhouse Microsoft experienced a drastic plunge in stock value, resulting in a staggering loss of approximately $360 billion in market capitalization. This significant decline occurred within just one day, reflecting a nearly 10% drop following a series of promising weeks.
Details of the Stock Decline
Microsoft’s stock, which had been enjoying a rally from $444 on January 21, 2026, to nearly $482 by January 28, began to collapse sharply. The downturn began in the extended trading session on Wednesday, January 29, 2026. By the end of the trading day on January 30, shares were priced at $435.55, a notable downturn for the company.
- Stock Price Drop: From nearly $482 to $435.55
- Market Capitalization: Decreased from $3.58 trillion to approximately $3.22 trillion
- Drop Percentage: Nearly 10%
Performance Context
The stock crash follows Microsoft’s announcement of robust second-quarter earnings for fiscal year 2026. The tech giant surpassed earnings expectations, reporting an adjusted earnings per share (EPS) of $4.14, exceeding the forecast of $3.97. Additionally, revenues reached $81.27 billion, outperforming the anticipated $80.27 billion.
Key Factors Impacting Investor Sentiment
Despite strong financial performance, investors reacted negatively due to several concerning indicators.
- Operating Margin: Implied fiscal third-quarter operating margin was 45.1%, slightly below the 45.5% consensus.
- Gross Margin: Dipped to a three-year low of 68%.
- Gaming Revenue: Experienced a 9.5% decline.
- Backlog Risks: 45% of Microsoft’s backlog is tied to OpenAI, raising concerns about dependency on the technology.
The OpenAI Connection
OpenAI remains a contentious topic, with debates centering around a potential AI bubble. Observers have highlighted the stark contrast between OpenAI’s heavy spending and its revenue generation efforts. Comments from Sam Altman suggesting a government bailout for OpenAI added to investor apprehensions, contributing to the mass sell-off of Microsoft shares.
Public Perception and Corporate Image
As the stock plummeted, Microsoft faced mounting criticism on social media and forums. The aggressive promotion of its Copilot AI, which is integrated into various software products, has led to customer frustrations. Users find it difficult to disable the service, fostering a negative perception.
The backlash has even given rise to humorous nicknames for the company, such as “Microslop,” indicating a shift in public sentiment. To counteract these feelings, CEO Satya Nadella has publicly addressed such concerns.
In conclusion, Microsoft’s stock has faced significant challenges despite a strong earnings report. Concerns over operating margins, revenue declines in specific sectors, and dependency on OpenAI have all contributed to this unprecedented market reaction.
