• Microsoft's recent earnings report revealed a slowdown in its Azure cloud business, with revenue growth at 31%, down from 34% in the previous quarter and slightly below analyst expectations of 32%. Despite an overall revenue increase of 12% to $69.6 billion, the deceleration in cloud growth raises concerns among investors, particularly as Microsoft has heavily invested in AI technologies. The company anticipates spending $80 billion on AI data centers this fiscal year, which has led to skepticism on Wall Street regarding the sustainability of such high expenditures amidst competitive pressures.

• The broader tech sector is experiencing volatility, particularly following the emergence of DeepSeek, a Chinese AI startup that has introduced a competitive open-source model. This development has intensified scrutiny on Microsoft’s AI investments and cloud strategy. The company’s stock fell approximately 4% in after-hours trading, reflecting investor anxiety over its ability to maintain growth in a rapidly evolving market. Analysts are closely monitoring how these dynamics will affect Microsoft's market position against rivals like Amazon and Google, especially as AI becomes a critical driver of cloud demand.