NEW YORK, February 16, 2026, 15:34 (EST) — Market closed
- Microsoft last closed at $401.32 on Friday; U.S. markets are shut Monday for Presidents Day.
- The stock is down about 17% so far this year as investors press big tech for clearer AI payoffs.
- Focus shifts to U.S. inflation data later this week and Nvidia’s results next week.
Microsoft shares last closed down about 0.1% at $401.32 on Friday, and will not trade on Monday as U.S. exchanges close for the Presidents Day holiday. (Nasdaq)
The break comes with Microsoft still under pressure in the broader pullback in AI-linked megacaps. The stock is down about 17% year-to-date, wiping roughly $613 billion off its market value to about $2.98 trillion as of Friday, as investors weigh risks to its AI business and stiffer competition from Google’s latest Gemini model and Anthropic’s Claude Cowork AI agent. (Reuters)
That retreat has been less about one headline than a mood shift. Traders have started to demand near-term earnings visibility, not just long-range AI ambition, and Microsoft sits near the center of that argument.
The company’s late-January results did little to settle it. Microsoft flagged record AI outlays and slower cloud growth, with Azure revenue up 39% in the October-December quarter, just ahead of Visible Alpha’s consensus estimate of 38.8%, and it disclosed core metrics on business usage of its Copilot assistant for the first time. “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. (Reuters)
Investors now want to see whether that spending shows up as steadier cloud demand and fatter margins, not just bigger data-center bills. The bar is higher because Microsoft is being valued as both a software cash machine and an AI infrastructure builder.
Regulatory risk also sits in the background. The U.S. Federal Trade Commission has stepped up scrutiny of Microsoft’s licensing and other practices, including how it bundles AI, security and identity software, Reuters reported, citing a Bloomberg News report; Microsoft and the FTC did not immediately respond to Reuters requests for comment. (Reuters)
Macro matters this week, too, because rate bets still whip valuations in growth stocks. The next release date for the personal consumption expenditures price index excluding food and energy — the Fed’s preferred inflation gauge — is February 20. (Bureau of Economic Analysis)
A hotter print would likely push bond yields up and lean on big tech again. A cooler number could buy Microsoft some time, but it would not answer the bigger question about returns on AI spending.
The downside scenario is straightforward: cloud growth slows while AI-related costs keep climbing, and investors keep trimming what they are willing to pay for future gains. Competition in AI assistants and models only raises the risk that Microsoft has to spend more to defend share.
When trading resumes, the next big AI signpost is Nvidia. The chipmaker will host a conference call on February 25 to discuss its fourth-quarter and fiscal 2026 results, a report many investors treat as a read-through on demand for the hardware underpinning Microsoft’s AI buildout. (Nvidia)
