Microsoft Sued by Shareholders Over Azure Growth Slowdown, Stock Falls 10% on June 12

According to Rappler.com, a class action lawsuit led by Michigan's City of St. Clair Shores Police and Fire Retirement System was filed in Seattle federal court on June 12, accusing Microsoft of defrauding shareholders by failing to disclose slowing Azure cloud business growth and massive AI infrastructure spending. The suit was triggered after Microsoft shares fell 10% on January 29 following weaker-than-expected quarterly earnings, erasing approximately $357 billion in market value.

For its fiscal second quarter ending December, Microsoft reported 39% revenue growth in Azure, down from 40% in the prior quarter, while capital expenditures reached $37.5 billion, up 66% year-over-year. Microsoft said on June 15 the claims are "without merit" and will vigorously defend itself in court.