Microsoft Corp (NASDAQ:MSFT) shares are set for further losses, with the stock down 4% premarket, after higher-than-expected investment spending unsettled investors.
The drop follows concerns over AI-related costs and comes just days after DeepSeek’s rise shook the tech sector.
The company had already signalled plans to spend $80 billion this year, but capital expenditure still exceeded forecasts by $1.6 billion.
Investors are now questioning whether such high spending is necessary, especially after DeepSeek’s AI model claimed to match US rivals at a fraction of the cost.
Microsoft also reported slower-than-expected growth in its Azure cloud business, despite strong AI contributions.
Ahead of the bell, the shares were down $16.61 at $425.72, which would wipe around $125 billion from the tech giant's market capitalisation.