Stifel downgraded Microsoft from Buy to Hold and slashed its price target to $392 from $540. The firm cited overly optimistic fiscal year 2027 expectations and Azure capacity constraints for the move. Analysts also highlighted intensifying AI rivalry from Google and Anthropic.
Microsoft reported fiscal second-quarter 2026 earnings of $4.14 per share, beating the consensus estimate of $3.93. Despite the earnings beat, the stock closed at $414.19 on February 4, 2026. Shares fell a further 1.09% in after-hours trading to $409.66.
The decline reflects a broader technology sell-off termed the 'SaaSpocalypse' following the release of Anthropic's new AI tool. Microsoft’s downward movement aligns with general Nasdaq weakness and ongoing sector rotation.