NEW YORK, February 16, 2026, 15:34 (EST) — The session has ended.
- Shares of Microsoft finished Friday at $401.32. U.S. markets are closed Monday for Presidents Day.
- Shares have fallen roughly 17% this year, with investors demanding more concrete AI returns from big tech.
- Attention turns to U.S. inflation numbers due later this week, with Nvidia’s earnings on deck for next week.
Microsoft ended Friday’s session off roughly 0.1% at $401.32. U.S. markets are shuttered Monday for Presidents Day, so there’ll be no trading. 1
Microsoft’s slide hasn’t let up, even as the frenzy around AI-linked megacaps cools. Shares have dropped roughly 17% since the start of the year, erasing about $613 billion in market value and pushing the company’s total to $2.98 trillion by Friday. Investors are wrestling with mounting risks to Microsoft’s AI business, not least as Google’s new Gemini model and Anthropic’s Claude Cowork AI agent dial up the pressure. 2
The pullback isn’t really pinned on a single headline—it’s more a shift in sentiment. Lately, traders want to see short-term earnings clarity rather than just big AI promises stretching years out, and Microsoft is right in the thick of that debate.
The late-January numbers from Microsoft barely moved the needle. The company pointed to record spending on AI and noted cooling cloud momentum, with Azure posting a 39% revenue gain for the October-December stretch—narrowly topping Visible Alpha’s 38.8% consensus. For the first time, Microsoft broke out key data on how businesses are actually using its Copilot assistant. “One big obvious issue is that revenues are up 17% and the cost of revenues are up 19%,” said Eric Clark, portfolio manager of the LOGO ETF. 3
Investors are watching to see if that spending translates into more consistent cloud demand and stronger margins, not just higher data-center costs. Expectations have climbed, with Microsoft now being priced as both a software profit engine and a builder of AI infrastructure.
Regulatory risk hasn’t gone away. The U.S. Federal Trade Commission is ramping up its examination of Microsoft’s licensing approaches as well as how the company combines AI, security, and identity offerings, Reuters said, pointing to a Bloomberg News report. Neither Microsoft nor the FTC got back to Reuters for comment. 4
Macro’s front and center again this week, with growth stock valuations still getting yanked around by shifting rate bets. Watch for the next core PCE price index print — the Fed’s go-to inflation measure — due out February 20. 5
If the number comes in hot, bond yields probably climb and big tech feels the pressure again. A cooler result might give Microsoft a breather, though it still leaves the main question about AI investment returns hanging.
Here’s the risk: cloud growth tapers off, AI costs don’t quit rising, and investors keep dialing back what they’ll shell out for future returns. If rivals in AI assistants and models push harder, Microsoft could be forced to open its wallet even wider just to keep its position.
Once trading picks up again, Nvidia’s up next on the AI radar. The chip giant has its conference call on February 25, where it’ll talk through fourth-quarter and fiscal 2026 numbers—a release that investors often use as a proxy for gauging hardware demand tied to Microsoft’s AI expansion. 6
