Investing in AI has been like playing high‑stakes poker for the past four years, until you win, everyone cheers.
Fun with intelligent chatbots and technological gambling
The problem arises when the cards say “I check,” and the table starts running out of free chips.
Microsoft realized this on its own skin when a federal lawsuit in Seattle landed an official class action.
Shareholders simply feel cheated. They claim that the board deliberately inflated the company’s market valuation, hiding the brutal truth about real, billions‑of‑dollars‑a‑year spending on the arms race infrastructure in the modern tech segment.
The American giant put everything on one card, becoming the main investor in OpenAI and spending billions of dollars on integrating Copilot into its own systems and entertainment ecosystem.
Competition with Gemini from Google gained such a dizzying pace that the corporation had to drastically redirect hardware resources, including scarce GPUs and CPUs, from commercial cloud to R&D purposes.
This hurt current performance. Even the powerful server infrastructure, which powers not only business but also modern gaming and subscription services, began to feel a significant drag.
For investors, this was a clear signal that the perfect and almost marble‑like façade of success began to crack under the weight of its own ambitions.
See also: Millions ask AI for medical advice and diagnoses. Does Microsoft’s new step cool doctors’ concerns?
Azure slows down, and the numbers don’t lie
The market does not forgive missteps, especially when they involve flagship products driving the corporation.
In Microsoft’s case, the spell broke at the end of January, when the company released its official financial report for the fiscal year ending in December. Although Azure cloud and related services recorded an impressive revenue growth of 39%, the bug lies in the details.
This result barely fit into market forecasts, and worse, it signaled a decline from the 40% recorded in the previous quarter.
To make matters worse, official forecasts for the first three months of 2026 assumed further slowdown to a level between 37% and 38%.
However, the real bomb that shook the market (and investors’ patience) turned out to be capital expenditures (CapEx). In the same fiscal quarter, Microsoft routed as much as 37.5 billion USD to infrastructure investments.
This is a cosmic jump of almost 66% compared to the same period last year. Wall Street expected an amount of about 34.3 billion USD, so exceeding forecasts by over 3 billion USD hit brokers like an extremely cold shower.
The financial markets’ reaction on January 29 was ruthless and immediate. Microsoft’s shares fell by a flat 10% that day, wiping out roughly 357 billion USD of market capitalization in just one trading day!
The proposed class action covers all investors who purchased the company’s shares between May 1 2025 and January 28 2026.
The list of defendants includes key architects of the company’s past strategy, including CEO Satya Nadella and CFO Amy Hood.
See also: The 2026 market is preparing a surprise? “Investors should ensure their portfolios are ready for an upward trend”
Source: Yahoo Finance.
