Microsoft (MSFT.US) saw its stock price tumble by approximately 10% on Thursday following its earnings announcement, marking the deepest single-day downswing since March 2020. Microsoft's market cap shrank by about USD357 billion in one day, closing at USD3.2 trillion on Thursday.

The UBS analyst team questioned Microsoft's strategy of reserving computing power for AI products like Microsoft 365 Copilot, noting that the success of these products has not yet matched that of OpenAI's ChatGPT.

The revenue growth of Microsoft 365 has not accelerated due to Copilot, and various surveys show limited increase in Copilot usage. The AI model market is highly competitive and capital-intensive, UBS said, opining Microsoft needs to justify the rationale behind these investments.
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