Microsoft Corporation (NASDAQ: MSFT)

This lawsuit is for anyone who acquired securities in Microsoft Corporation (NASDAQ: MSFT) from May 1, 2025 through January 28, 2026.

The lawsuit alleges that the Company and certain of its executives violated federal law. Specifically, the lawsuit alleges that, throughout the time period mentioned above, the Company misled investors regarding its financial condition. More specifically, the lawsuit alleges that the Company misled investors by failing to timely tell investors that the Company’s flagship proprietary AI model ranked well below competitors on a number of benchmark tests which would require the Company to increase by billions of dollars its capital expenditures and divert graphics processing unit (GPU) and central processing unit (CPU) capacity away from fulfilling demand for its profitable Azure services in order to improve the competitive positioning of its critical Copilot family of products.

On January 28, 2026, Microsoft announced disappointing results for its second quarter of fiscal 2026, revealing that growth of its cloud computing platform, Azure, had slowed suddenly and fallen below analyst expectations due primarily to computational capacity constraints, as the Company had diverted central processing unit and graphics processing unit capacity to applications for its generative AI chatbot, Copilot, and AI-related research and development. The Company also revealed that its capital expenditures had increased to $37.5 billion during the quarter, causing the Company’s capital expenditures for the first six months of fiscal 2026 to expand to $72.4 billion compared to $88.2 billion for the entirety of fiscal 2025, largely due to AI-related research and development and Copilot development and capacity buildout costs. Additionally, Microsoft disclosed that the amount of paying users of Copilot was well below analyst estimates. On this news, the price of the Company’s stock dropped precipitously on unusually heavy trading volume.

The Law Offices of Howard G. Smith seeks to recover damages on behalf of class members. If you acquired securities in Microsoft Corporation (NASDAQ: MSFT) from May 1, 2025 through January 28, 2026 you may join the lawsuit by submitting your information online, or you may call the Law Offices of Howard G. Smith and speak to Mr. Smith directly to learn how he can protect your rights.