Shares of U.S. technology major Microsoft plunged sharply in Thursday’s trading, recording the company’s steepest single-day fall in nearly five years. The stock slid close to 10%, wiping out an estimated ₹32 lakh crore in market capitalisation in a single session and sending tremors across global technology markets.
The sell-off followed investor disappointment over Microsoft’s latest earnings commentary and forward guidance, which raised concerns about moderating growth in its core businesses. By the close of trade, the company’s market value slipped to about ₹2.9 crore crore, marking one of the largest single-day wealth erosions ever recorded by a listed firm.
During intraday trade, Microsoft shares opened lower and remained under sustained selling pressure throughout the session, touching fresh lows as investors rushed to reassess growth expectations in a high-valuation environment.
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Earnings outlook dents investor confidence
Market participants attributed the sharp decline primarily to softer-than-expected signals from Microsoft’s quarterly performance and outlook. While overall revenues remained robust, the market reacted negatively to indications of slowing momentum in the company’s cloud business — widely viewed as the backbone of Microsoft’s long-term growth strategy.
Growth in Azure and other cloud services came in at 39%, slightly below market expectations of around 39.4%. Though the gap was marginal, analysts said the miss carried disproportionate significance given the premium valuation assigned to Microsoft and the market’s dependence on sustained cloud-led earnings acceleration.
Further pressure came from the company’s guidance for its More Personal Computing segment, which includes Windows, devices and related offerings. Microsoft projected quarterly revenue of roughly ₹1.05 lakh crore from this division, falling short of Street estimates closer to ₹1.14 lakh crore. The company also flagged a softer outlook for operating margins, adding to investor unease.
Data centre capacity raises red flags
Investor sentiment was further unsettled by management commentary around infrastructure constraints. Executives indicated that limitations in data centre capacity may have affected cloud performance, with prioritisation of internal requirements impacting the pace at which customer demand could be serviced.
Market analysts said the scale and speed of Microsoft’s data centre expansion will be under intense scrutiny in the coming quarters. With artificial intelligence-driven workloads accelerating sharply, the company’s ability to expand infrastructure without hurting margins is seen as a key determinant of future growth.
Several analysts noted that execution risks tied to capital expenditure, supply chains and energy availability could influence cloud growth trajectories, particularly as competition intensifies across the global technology sector.
Loss dwarfs fortunes of global billionaires
The magnitude of the one-day sell-off has drawn widespread attention across global markets. The ₹32 lakh crore erased from Microsoft’s valuation in a single session exceeds the total net worth of most individuals on global billionaire lists, underlining the scale of the market reaction.
According to global wealth estimates, the value destroyed in Microsoft stock in one trading day is larger than the combined fortunes of several of the world’s wealthiest business leaders, highlighting how swiftly sentiment can shift even for the most dominant technology companies.
What investors will watch next
Going forward, investors are expected to focus closely on three key areas: the pace of cloud growth, clarity on data centre expansion timelines, and management’s ability to protect margins amid rising infrastructure investments.
Demand linked to artificial intelligence, enterprise software spending trends, and capital allocation discipline will also play a critical role in shaping market expectations. Analysts cautioned that with valuations still elevated across the technology sector, earnings volatility could remain high.
Market experts said Microsoft’s sharp decline serves as a broader reminder of the current market environment, where even modest deviations from expectations can trigger outsized reactions. With growth assumptions priced aggressively into large-cap technology stocks, tolerance for disappointment remains low.
As global investors reassess risk across tech portfolios, Microsoft’s performance in the coming quarters is likely to act as a bellwether for broader sentiment across international equity markets.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
