InstantWhyThe numbers
CNBC reports that short interest in Microsoft has reached its highest level in a decade ahead of the company's second-quarter earnings report. Bearish investors have held their positions rather than covering ahead of the results, according to the report. Microsoft has not commented on the short interest data.
Why it matters
That skepticism matters because Microsoft has poured billions into building out capacity for artificial intelligence products, and the market has largely rewarded that investment with a higher valuation. If short sellers are correct that revenue growth will disappoint relative to capital expenditure, it would mark a turning point in how investors price the AI buildout across Big Tech.
How this compares
Microsoft reported quarterly earnings in late July as investors scrutinized returns on AI spending, following months of heavy investment in data centers and infrastructure to support artificial intelligence products. The company's capital expenditure has drawn comparisons to other technology firms racing to build AI capacity, including partnerships like the one between Core Scientific and AMD that doubled the Bitcoin miner's revenue through AI hosting. Qualcomm and other chipmakers have similarly faced investor questions about whether AI growth can offset weakness in legacy businesses like smartphones.
What to watch
Microsoft's second-quarter results will show whether the company's AI products are generating revenue growth that matches the scale of its infrastructure investment. The level of short covering, or lack thereof, after the earnings release will indicate whether bearish investors see evidence their thesis is playing out. Guidance on future capital spending and AI product adoption will be closely watched for signs the return on investment is materializing.
- ✓Detected and written at 2026-07-28 20:27
- ✓First reported by CNBC
- ✓Written from public facts in our own words — never a copy
- ✓Published as fast as possible; our team holds editorial responsibility
Sources
- CNBC — Top News: https://www.cnbc.com/2026/07/28/microsoft-short-interest-hits-decade-high-ahead-of-q2-earnings.html
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