Microsoft Posts Record Income, But Stock Price Falls as Investors Worry About High Spending

Microsoft's net income for fiscal 2026 rose 31% to $133.7 billion, outpacing its revenue growth of 18% to $331.8 billion.

The company's market cap has dropped 4.5% since last year and now sits at about $3.59 trillion.

This unexpected decline in the stock price comes despite Microsoft's strong business performance, with Azure revenue topping $100 billion for the fiscal year and growing 41%, and commercial remaining performance obligation (contracted work not yet recognized as revenue) hitting $678 billion, up 84% year over year.

However, Microsoft's capital expenditures have exceeded its operating income, standing at about $175 billion for calendar 2026, which is a concern for investors.