Microsoft Plunges 10%, Erasing $357B in Market Value After AI Spending Concerns

Microsoft Corp. (MSFT) shares tumbled 10% on January 29, 2026 — its steepest drop since March 2020 — wiping out $357 billion in market value, the second-largest single-day loss in U.S. stock history. The selloff followed Wednesday’s earnings report showing Azure growth slowed while capital expenditures surged 66% to a record $37.5 billion, fueling investor doubts over AI return on investment. Only Nvidia’s $593 billion wipeout after DeepSeek’s model launch last year was larger. Microsoft’s loss exceeds the market caps of 90% of S&P 500 firms. Peers Alphabet and Nvidia briefly shed over $100B each; Alphabet closed up 0.7%, Amazon down 0.5%. Analysts warn MSFT must reprice to reflect historic fair value absent clear AI ROI.