Microsoft Faces Shareholder Suit Over $357 Billion Wipeout After Azure Slowdown and AI Spending Disclosure
Updated
Updated · Reuters · Jun 15
Microsoft Faces Shareholder Suit Over $357 Billion Wipeout After Azure Slowdown and AI Spending Disclosure
2 articles · Updated · Reuters · Jun 15
Summary
A Michigan pension fund filed a proposed class action in Seattle federal court, accusing Microsoft of hiding slowing Azure growth and billions in AI infrastructure needs that allegedly inflated its stock.
The suit followed Microsoft's January 28 earnings report, after which the shares fell 10% on January 29, erasing about $357 billion in market value in the company's biggest one-day drop in nearly six years.
Microsoft reported 39% Azure and other cloud revenue growth for the December quarter, down from 40% in the prior quarter, and forecast 37% to 38% growth for the following quarter.
Capital spending reached $37.5 billion—up nearly 66% from a year earlier and above the $34.3 billion analysts expected—as Microsoft said capacity constraints reflected resources diverted to AI development and Copilot.
The proposed class period runs from May 1, 2025 to January 28, 2026, and names CEO Satya Nadella, CFO Amy Hood and other executives as defendants.