Microsoft Corporation (MSFT.US) stock price plunges 23% this year! Skyrocketing capital expenditures and concerns about AI are two major "problems". This month's financial report will be a critical test.

Some unfavorable factors impacting Microsoft Corporation (MSFT.US) stock price are unlikely to dissipate in the short term. In a recent report released on Monday, Goldman Sachs Group, Inc. analyst Gabriela Borges pointed out that Microsoft Corporation's stock price has dropped 23% this year mainly due to two factors. First, capital expenditures continue to rise, but Azure cloud business sales have not been adjusted accordingly. This has reignited concerns in the market about investment returns and Azure's competitive position relative to competitors such as Amazon.com, Inc.'s Amazon Web Services. Secondly, the market continues to worry that Microsoft Corporation's enterprise office applications (such as Office 365) may be impacted by competing AI products, such as Anthropic's Claude Cowork. These concerns are partly due to the market's belief that Microsoft Corporation's Copilot feature lags behind other AI tools. Microsoft Corporation plans to release its financial report after the close on April 29th. Analysts added, "We believe that the risks and rewards are roughly balanced before the release of the financial report. Short-term fundamental prospects are mixed, but investor expectations have also decreased." After the poorly received quarterly financial report released on January 28th - which led to a nearly 10% drop in Microsoft Corporation's stock price, Microsoft Corporation needs to rebuild investor confidence. The focus of investors is the company's capital expenditure of up to $37.5 billion to build data centers to support its AI development. The market's interpretation is that Microsoft Corporation's profit margins will face pressure in the coming quarters. Wedbush tech analyst Dan Ives said, "Wall Street originally hoped to see less capital expenditure and faster cloud and AI monetization speeds, but the reality is quite the opposite. We have always believed this is a long-term development process and Microsoft Corporation needs to continue focusing on data center construction as more and more customers are embarking on the AI path." However, Wall Street's excessive focus on capital expenditure has overshadowed the fact that Microsoft Corporation actually performs well in other areas. Microsoft Corporation reported robust performance - revenue reached $81.3 billion, a 17% year-on-year growth. This performance was mainly driven by the company's Intelligent Cloud division, especially the Azure business, with revenue growing by 39% as enterprises accelerate their transformation to AI-driven infrastructure. At the same time, Wall Street's expectations for Microsoft Corporation's earnings per share (EPS) remain stable - which may reflect strong performance in its core business areas. J.P. Morgan analyst Mark Murphy said, "In our view, the bigger picture is that Microsoft Corporation's two core business pillars are approaching a scale of nearly $100 billion - the Azure business, despite capacity constraints, is still growing at over 30%; the Microsoft 365 business maintains moderate double-digit growth. In addition, the company has achieved revenue and EPS growth of over 20% for three consecutive quarters."