Microsoft Stock Drops Below $500 Amid Infrastructure Spending Concerns

Microsoft's stock has fallen below $500, raising concerns among investors about the company's massive infrastructure spending and competitive pressures. Despite strong fiscal 2026 results, with revenue up 18% and net income up 31%, the significant capital expenditures are causing investor caution.

The ongoing restructuring within Xbox and increasing competition from Google Workspace are adding to Microsoft's challenges. The company needs to reclaim the $500 level to stabilize its stock, as failure to do so may lead to further declines.

Microsoft spent $41 billion on capital expenditures in its fiscal fourth quarter, with roughly two-thirds directed toward shorter-lived assets such as CPUs and GPUs. Cash flow from operations reached $55.4 billion, while free cash flow was $19.6 billion.