"When the Magnificent Seven member reported Q2 earnings on Wednesday, Jan. 28, shares fell around 7% in after-hours trading despite beating Wall Street estimates for earnings and revenue. The company announced that cloud revenue topped $51.5 billion for the first time, while EPS and revenue came in at $5.16 and $81.27 billion, respectively. On Oct. 1, 2025, the company announced that it was increasing its Xbox Game Pass subscription by 50%."
"Microsoft navigates challenges, but remains a prime investment due to its AI and cloud dominance. Third-quarter earnings showcased robust demand for its Intelligent Cloud segment, though tariff risks linger. Microsoft's $80 billion cash reserve fuels its $80 billion investments in cloud and AI infrastructure, with over half in the U.S. Its Microsoft 365 Copilot, adopted by , drives productivity revenue, positioning Microsoft to capture the AI market's 37% compounded annual growth predicted through 2030."
Shares of Microsoft gained 7.57% over the past five trading sessions after a prior 4.87% decline, leaving a one-year gain of 7.70% and an over 11% drop from the Oct. 28, 2025 all-time high. Q2 results reported EPS of $5.16 and revenue of $81.27 billion, with cloud revenue exceeding $51.5 billion for the first time, yet shares fell about 7% in after-hours trading. Gaming contributed over 8% of revenue, with 50 million monthly subscribers and nearly $5 billion in year-over-year revenue after a Game Pass price increase. The company cut roughly 3% of its workforce, holds an $80 billion cash reserve, and is investing $80 billion in cloud and AI infrastructure while leveraging Microsoft 365 Copilot adoption and multi-cloud partnerships to pursue AI market growth amid tariff and macro risks.
Read at 24/7 Wall St.
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