Microsoft exceeded earnings expectations — why did the stock drop 7% after hours?

The reason is that Azure’s growth is slowing down, and the dependency on OpenAI has become starkly apparent. Q2 fiscal 2026 revenue reached $81.27 billion, compared to the $80.27 billion that was anticipated. EPS was $4.14, an increase from the $3.97 expected. Both figures are positive surprises. However, Azure growth guidance for Q3 was only projected at 37% to 38% in constant currency, barely hitting the 37.1% consensus.