U.S. technology stocks fell on Thursday, led by a 12% decline in Microsoft, with worries about AI spending dragging down the broader market.
The tech-heavy Nasdaq Composite was down 0.72% at the close of trading, while the S&P 500 was down 0.1%. The Dow Jones Industrial Average ended the day slightly higher at 55.96 points (up 0.11%).
Bitcoin was trading 5.66% lower at $84,131.98.
Microsoft pared some of its losses for the day, but its stock still suffered significant losses on concerns about a potential slowdown in AI spending and cloud growth, dropping 9.99% to $4,433.50 per share.
The stock decline came even as the company beat expectations and reported cloud revenue of more than $50 billion after the close on Wednesday.
“While we are only in the early stages of AI adoption, Microsoft has already built an AI business that is larger than some of our largest franchises,” CEO Satya Nadella said in a statement.
The company’s Intelligent Cloud division, which includes its Azure business, had revenue of $32.9 billion in the quarter, beating expectations of $32.2 billion. Microsoft said revenue from Azure and other cloud services rose 39%.
Microsoft’s close relationship with OpenAI has made it one of the biggest beneficiaries of the artificial intelligence boom, with the company’s market capitalization exceeding $4 trillion in July. Since then, AI spending has been on the decline due to widespread concerns about AI spending.
In contrast, Meta closed more than 10% higher at $738.31 per share after raising its 2026 capital spending outlook from $72.2 billion to between $115 billion and $135 billion. Facebook’s parent company’s profits also exceeded analysts’ top and bottom line estimates.
Meta and Microsoft are two of the big four hyperscalers pouring billions of dollars into data centers. Apple was scheduled to report its results after Thursday’s trading, while Amazon’s results are expected to be released next week.
