Bethesda Artist Says Microsoft’s Xbox Ended a No-Layoff Era, Turning Studio Retirement Dreams into Yearly Job Cuts

Microsoft (MSFT) shares rose 20% since July, driven by AI investments, particularly Azure. Azure revenue grew 42% to $29.42B in Q2, with guidance of 44-45% for the current quarter. However, capital expenditures reached $115.9B in FY26, raising sustainability concerns. Hedge fund ownership dipped slightly in Q2, with a forward P/E of 24.81.

Asha Sharma, new head of Xbox, is implementing a strategy of radical transparency to revive Microsoft's gaming business. Xbox revenue is around $23 billion but declining, with profit margins at 3%. Sharma has announced a major restructuring, including 3,200 job cuts and spinning off four studios. She is focusing on key franchises like Halo and The Elder Scrolls, according to The Wall Street Journal.

Microsoft's communications boss Frank Shaw is leaving after nearly 30 years, according to a memo. Shaw, 64, has been in his role for 17 years and played a major role in shaping Microsoft's external communications. His departure comes as Microsoft undergoes changes, focusing on AI and cloud computing. Microsoft's Azure cloud business crossed $100 billion in annual revenue, driven by AI demand.

SanDisk's 2,107% one-year surge, driven by AI storage demand, has reclassified Apple and Microsoft as value stocks in indexes, according to Morningstar. SanDisk reported $20.2B revenue for fiscal 2026, with analysts targeting $2,125 and a $15.5B buyback authorized. Its performance has increased tech weighting in value indexes to 20%.

Microsoft (MSFT) and Alphabet (GOOGL) reported earnings, with Azure growing 43% and Google Cloud surging 82%. Alphabet's valuation is cheaper, but Microsoft generated $20B in free cash flow while Alphabet's turned negative. Analysts highlight AI capex ROI as a key risk for both.

Microsoft plans to expand its data center capacity from 12 GW to 38 GW by 2032, aiming to address capacity shortages that have led to lost clients and service restrictions. The expansion, the largest in the company's history, faces political and physical constraints, including grid interconnection delays and community opposition. Microsoft's capital expenditures reached $145 billion in fiscal year 2026, with additional lease commitments totaling $329 billion. The company has also extended the es