Quick overview

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Microsoft shares on Thursday wiped out $357 billion in value, making it the second-largest selling session in stock market history.

The software giant’s stock closed down 10% following Microsoft’s earnings after the bell on Wednesday, which revealed record spending on artificial intelligence as growth at its key cloud unit slowed, its largest decline since March 2020.

NVIDIA Corp. was the only company whose valuation was destroyed in a single day’s $593 billion rout last year after the launch of DeepSeek’s low-cost AI model.

Peers like Alphabet and Nvidia both lost more than $100 billion at one point on Thursday, indicating that the chill was felt elsewhere as well. Amazon’s stock dropped 0.5 percent, while Alphabet’s recovered, closing up 0.7 percent. Investors’ doubts about the long-term viability of Big Tech’s hundreds of billions of dollars spent on AI are growing at the time of the selloff. According to Microsoft’s results, capital expenditures increased by 66% to a record $37.5 billion in the most recent quarter, but growth at its closely watched Azure cloud computing division slowed from the previous quarter.

This is one of the worst selloffs Microsoft has ever experienced. Only a few days, including Black Monday in 1987, the .com bubble, and the peak of the Covid-19-fueled selloff in 2020, have seen the stock drop significantly since its initial public offering in 1986.