Glancy Prongay Wolke & Rotter LLP, a leading national shareholder rights law firm, announces that a securities fraud class action lawsuit has been filed on behalf of investors who purchased or otherwise acquired Microsoft Corporation (“Microsoft” or the “Company”) (NASDAQ: MSFT) common stock between May 1, 2025 and January 28, 2026, inclusive (the “Class Period”). Microsoft investors have until August 11, 2026 to file a lead plaintiff motion.
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What Happened?
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, Microsoft’s stock price fell $48.13, or 9.99%, to close at $433.50 per share on January 29, 2026, thereby injuring investors.
What Is The Lawsuit About?
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Microsoft’s Copilot family of products had experienced significant brand positioning, user experience, usage, data siloing, computational capacity, organizational, and interoperability problems; (2) that Microsoft’s flagship proprietary AI model ranked well below competitors on a number of benchmark tests; (3) that Microsoft needed to increase by billions of dollars its capital expenditures and divert GPU and 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 and increase its AI-related R&D; (4) that, as a result of the foregoing, Microsoft had failed to convert a significant percentage of its commercial Microsoft 365 users to paid Copilot subscriptions and the Company’s Copilot offerings had lost market share to rival products, a trend that was increasing; and (5) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
If you purchased or otherwise acquired Microsoft common stock during the Class Period, you may move the Court no later than August 11, 2026 to request appointment as lead plaintiff in this putative class action lawsuit.
Contact Us To Participate or Learn More:
If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact us:
Charles Linehan, Esq.,
Glancy Prongay Wolke & Rotter LLP,
1925 Century Park East, Suite 2100,
Los Angeles California 90067
Email: shareholders@glancylaw.com
Telephone: 310-201-9150,
Toll-Free: 888-773-9224
Visit our website at www.glancylaw.com.
Follow us for updates on LinkedIn, Twitter, or Facebook.
If you inquire by email, please include your mailing address, telephone number and number of shares purchased.
To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260618480506/en/
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