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Barchart
Barchart
Mark R. Hake, CFA

Microsoft's Free Cash Flow Crashes Due to High Capex - But Is MSFT Stock's Dip Overdone?

Microsoft Barchart NTM Stock Analysis TTM

Microsoft Corp (MSFT) reported strong operating cash flow (+60% YoY) for its fiscal Q2 ending Dec. 31, 2025. However, free cash flow fell 9.3% YoY and was down 77% QoQ.  This was mainly due to a massive increase in AI-related capex. But, there could be reasons why MSFT's decline has been overdone.

MSFT is at $430.13, down over 10.4% from $481.63, where it closed on Jan. 28. Is this where MSFT will stay?

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