Microsoft tests major support as pressure on shares persists after record expectations

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Microsoft tests major support as pressure on shares persists

Azure continues to grow, but questions about AI monetization remain

Despite the market’s negative reaction, the fundamentals of Microsoft’s cloud business remain strong.

Revenue from the Intelligent Cloud segment increased 29% to $32.9 billion, while total Microsoft Cloud quarterly revenue surpassed the $51.5 billion mark for the first time, up 26% year-over-year.

However, investors are increasingly questioning the timeline for AI investment payback. According to market estimates, Microsoft’s capital expenditures in fiscal year 2026 could approach $190 billion, roughly two-thirds higher than in the previous period.

Particular attention is being paid to the performance of Microsoft 365 Copilot. Although the number of paid licenses has grown to 20 million seats and enterprise adoption has increased by more than 160%, the conversion rate from free Copilot Chat users to paid subscriptions remains relatively low. This factor continues to fuel debate over the actual ROI of large-scale investments in generative AI.

Build 2026: Microsoft bets on its own AI ecosystem

The key event of June was Microsoft Build 2026, which highlighted the company’s strategic shift toward greater independence from OpenAI. Microsoft unveiled seven proprietary models within the MAI (Microsoft AI) family, including its flagship reasoning model, MAI-Thinking-1. According to the company, the model was developed entirely in-house and represents a major step toward building a comprehensive lineup of foundational AI solutions.

At the same time, Microsoft introduced Scout, a next-generation personal AI agent built on OpenClaw and integrated into the Microsoft 365 ecosystem. The company positions it as the next stage in the evolution of enterprise assistants and autonomous workplace agents.

Other major announcements at Build 2026 included:

- Project Solara — a new operating platform for agent-based AI systems and next-generation devices;

- Surface RTX Spark Dev Box — a compact workstation featuring NVIDIA accelerators for running large AI models locally;

- Azure Cobalt 200 — a new generation of cloud computing infrastructure with significant performance improvements for AI workloads;

- Microsoft Execution Containers (MXC) — a security architecture for managing autonomous AI agents;

- Majorana 2 quantum processor, delivering roughly a thousandfold improvement in qubit accuracy and bringing the company closer to a commercially viable quantum computer by the end of the decade.

In effect, Build 2026 demonstrated Microsoft’s intention to control every layer of the AI stack — from models and cloud infrastructure to agent platforms and specialized hardware.

Near-term outlook

Following the breakdown of several support levels, MSFT declined toward the key support zone near $400, as I previously warned in Microsoft declines as market seeks returns on AI investments. From current levels, a rebound toward the $420–430 area is possible, where bulls may encounter renewed resistance from bears. A loss of support could trigger a further decline toward the $390–380 range.

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