Microsoft

(AI video summary)

This video was created on 29 January 2026 for IG audiences by ausbiz.

NASDAQ code: MSFT

Marginal revenue growth amid rising costs

Microsoft recently marginally beat quarterly revenue expectations, despite a 66% rise in capital expenditure (capex). While its cloud computing efforts expand, analysts note growing competition from Google's Gemini and other artificial intelligence (AI) offerings as a threat to Microsoft’s market share. Chief Financial Officer Amy Hood mentioned that future capex should be lower, although rising memory chip costs may impact cloud margins.

Mixed market reactions

Microsoft's intraday trading showed slight positivity, but extended trading saw its stock drop over 6%. Analysts are divided, highlighting both strengths and challenges. Some express confidence in Microsoft’s stable business model, pointing to its 450 million Microsoft 365 licenses and growing Copilot subscribers as key strengths. They argue Microsoft's client base is unlikely to shift easily.

Investment outlook

Microsoft’s prospects divide the market, as the 15 million Copilot uptake seems underwhelming compared to market potential. Concerns about OpenAI, where Microsoft holds a significant stake, add to caution amid changing AI perceptions.