Microsoft Class Action Lawsuit Filed Over Alleged Securities Fraud and Copilot Challenges

A class action lawsuit has been filed against Microsoft Corporation (NASDAQ: MSFT) over allegations of securities fraud and other unlawful business practices.

The lawsuit, which was announced by Pomerantz LLP, a law firm with extensive experience in corporate, securities, and antitrust litigation, concerns the company's fiscal second quarter ended December 31, 2025. During this period, Microsoft's Azure growth slowed suddenly and fell below analyst expectations, leading to a nearly 10% drop in stock price.

On January 28, 2026, Microsoft announced disappointing results, revealing that its capital expenditures had increased to $37.5 billion during the quarter. Additionally, the company disclosed that the number of paid Microsoft 365 Copilot seats totaled only 15 million, which was materially below analyst estimates.

The lawsuit also cites a February 3, 2026, article in The Wall Street Journal, which revealed severe challenges and functionality issues plaguing Microsoft's Copilot offerings. This led to Copilot losing market share during the Class Period to competing products such as Google's Gemini.