Microsoft exceeded revenue and earnings expectations, but AI spending concerns analysts. Stock trading at lowest levels in three years. Revenue for Q2 2026 rose 17% to $81.3 billion, with cloud computing division Azure growing 29%. Capex surged 66% to $37.5 billion, affecting cash flow. RPO increased 110% to $625 billion, with 45% tied to OpenAI, raising strategic questions. Stock dropped over 10% post-earnings, forming a death cross. Microsoft now trades at a low forward P/E ratio of 26. The Motley Fool recommends 10 other stocks over Microsoft for potential returns.

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