Microsoft (MSFT) Traded Lower as Its Reported Azure Cloud Growth and Forward Guidance Fell Short of Expectations

3 days ago 4

Soumya Eswaran

Tue, January 20, 2026 astatine 8:15 AM CST 4 min read

Fred Alger Management, an concern absorption company, released its “Alger Spectra Fund” fourth-quarter 2025 capitalist letter. A transcript of the missive tin beryllium downloaded here. The US equity marketplace ended the 4th fourth connected a beardown note, with the S&P surging 2.7%, maintaining its dependable upward momentum. Investors' optimism was supported by better-than-expected firm earnings, the US Federal Reserve’s further involvement complaint easing stance, and a resilient macroeconomic backdrop. Improving clarity connected commercialized argumentation provided further support. Meanwhile, the 4th was characterized by expanding divergence beneath the Index’s surface. While AI remains the market’s biggest tailwind, it is being scrutinized for funding, limitations, and imaginable to instrumentality investment. The steadfast continues to observe secular trends that contiguous charismatic concern opportunities. Furthermore, U.S. concern spending appears to beryllium rising owed to rising request for AI infrastructure and taxation incentives from the One Big Beautiful Bill. Against this backdrop, Class A shares of the Fund underperformed the Russell 3000 Growth Index successful Q4 2025. The Information Technology and Utilities contributed to the comparative show of the Fund successful the quarter, portion the Health Care and Communication Services sectors detracted from performance. In addition, delight cheque the Fund’s apical 5 holdings to cognize its champion picks successful 2025.

In its fourth-quarter 2025 capitalist letter, Alger Spectra Fund highlighted stocks specified arsenic Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is simply a multinational bundle institution that develops and supports software, services, devices, and solutions. The one-month instrumentality of Microsoft Corporation (NASDAQ:MSFT) was -5.17%, and its shares gained 7.19% of their worth implicit the past 52 weeks. On January 13, 2026, Microsoft Corporation (NASDAQ:MSFT) banal closed astatine $459.86 per share, with a marketplace capitalization of $3.418 trillion.

Alger Spectra Fund stated the pursuing regarding Microsoft Corporation (NASDAQ:MSFT) successful its 4th fourth 2025 capitalist letter:

"Microsoft Corporation (NASDAQ:MSFT) is simply a beneficiary of firm America’s transformative digitization. The institution operates done 3 segments: Productivity and Business Processes (Office365, LinkedIn, and Dynamics), Intelligent Cloud (Server Products and Cloud Services, Azure, and Enterprise Services), and More Personal Computing (Windows, Devices, Gaming, and Search). Shares detracted during the 4th aft the institution reported Azure unreality maturation and guardant guidance fell abbreviated of elevated capitalist expectations, successful portion due to the fact that gross designation lagged beardown request and the institution remained capableness constrained. While Azure inactive grew 39% year-over-year (YoY) and absorption guided to 37% maturation successful the existent quarter, we judge investors focused connected the near-term mismatch betwixt request and disposable capacity. Importantly, request signals improved: commercialized bookings surged (reported up astir 111% YoY) and remaining show obligations roseate 51% compared to 37% from the anterior quarter, extending gross visibility. To code the backlog and enactment AI/cloud workloads, absorption signaled a step-up successful investment, including astir $30B of superior expenditures (CapEx) successful the existent 4th and an anticipation that fiscal-2026 CapEx maturation volition beryllium higher than fiscal-2025."