A Michigan pension fund filed a shareholder class-action lawsuit against Microsoft for allegedly misleading investors. The complaint names CEO Satya Nadella and CFO Amy Hood as defendants. The legal action covers the period from May 1, 2025, to January 28, 2026.
The lawsuit alleges Microsoft failed to disclose slowing growth in its Azure cloud business. It also claims the company hid the massive capital expenditures required for AI infrastructure. These omissions allegedly resulted in an artificially inflated share price.
Microsoft's market value dropped by approximately $357 billion following an earnings report on January 29, 2026. The filing also highlights performance and positioning issues with Copilot AI products. Separately, the company is reportedly resetting its Xbox gaming division amid hardware supply shortages.