Microsoft Stock Bounces Back, But Spending Concerns Linger

Microsoft's stock has made a sharp recovery after hitting a low of $352.83 in late June, rising about 46% to roughly $516 as of now.

The drop from its record close of $542.07 on October 2025 was around 35%, but the rebound mainly happened in one week, with the stock leaping about 26% in the four trading days after Microsoft's fiscal fourth-quarter report on July 29.

Azure, Microsoft's cloud computing platform, finally sped up its growth in July, reaching 43% for the quarter ended June 30. The company expects Azure growth of around 45% in constant currency for the quarter ending Sept. 30.

However, the spending on capital expenditures continues to rise, with management guiding for around $175 billion this year and expecting it to climb again in fiscal 2027. Free cash flow dropped around 23% to $19.6 billion in the June quarter, and Hood stated that the aim for fiscal 2027 is just to 'remain free cash flow positive.'