$Microsoft(MSFT.US)

Conclusion first: Short-term wait-and-see, medium-term build positions in batches, long-term hold and track AI and capital expenditure returns; not recommended to go all in at once.

1. Core reasons for the plunge (After hours, Jan 29, 2026)

- Azure grew 39% (expected 37.8%), but slowed from 40% last quarter, raising concerns about peak growth.

- Capital expenditure of $37.5 billion (up 66% YoY, expected $34.3 billion), market questions AI investment payback period.

- Gaming business underperformed, coupled with Fed holding rates steady and rising Treasury yields, sentiment remains cautious.

2. Investment strategies for different time horizons

- Short-term (1-2 weeks): Wait-and-see, don't rush to buy the dip

1. Watch the market reaction after US market opens on Jan 29, avoid volatility risk on first trading day post-earnings.

2. Key support levels to watch: $470 (recent low), $450 (medium-term support); if breaks below $450 with volume, short-term risks increase.

3. Tracking metrics: Whether Azure growth stabilizes, Copilot conversion rate, any adjustments to capex guidance.

- Medium-term (1-3 months): Build positions in batches, control pace

1. First entry: When pulls back to $450-470 range, allocate 30% of total capital, corresponding to key support since May 2025.

2. Second entry: If falls to $430-450 and stabilizes, add another 30% to lower average cost.

3. Stop-loss: If breaks below $430 and fails to recover within 3 sessions, consider reducing exposure to avoid further downside.

- Long-term (6-12 months): Hold and focus on fundamentals

1. Core thesis: AI commercialization (Copilot), Azure's cloud leadership, subscription-based cash flow stability remain intact.

2. Key tracking points: AI revenue contribution, ROI on capex, cloud margin recovery.

3. Price target reference: Average institutional target ~$610, implying 28x 2027 estimated EPS.

3. Key risks and opportunities

- Risks: AI demand disappointment, intensifying cloud competition, high rates pressuring valuation, sustained high capex squeezing profits.

- Opportunities: Copilot paid user growth beats, Azure reacceleration, cost efficiencies from AI chips (Maia 200) materialize.