Microsoft is shifting focus to fixing Windows 11 performance and reliability after months of buggy updates, boot failures, and growing user frustration.

Microsoft's stock saw its biggest daily decline since 2020 on Thursday after investors were dismayed by its cloud computing business not growing enough.

Shares of Microsoft plunged 12% and software stocks hit a bear market. The S&P 500 edged back from 7,000 as AI spending fears were rekindled.

Microsoft reports revenue of $81.3 billion for the October-December quarter, marking a 17% increase from the previous year.

Microsoft’s new warning was spotted by Windows Latest. “In an updated support document, the company has confirmed that the update is indeed crashing some PCs.” This primarily affects commercial PCs. “Most home users won’t run into the problem.”

Shares dropped the most since March 2020 on Thursday, with investors fleeing the stock amid slower cloud growth and big spending on AI.

Higher than anticipated capital spending and disappointing gaming results from the holiday season weighed on shares.

Physical AI marks a transition from robots as programmed tools to robots as adaptable collaborators. That transition will unfold over years rather than months, but the foundation models emerging from Microsoft, Nvidia and Google establish the architectural patterns that will shape enterprise robotics for the next decade.

Jan 29 (Reuters) - AI startup Perplexity has signed a $750 million agreement with Microsoft to use its Azure cloud service, Bloomberg News reported on Thursday, citing people familiar with the matter.

Microsoft's stock tumbled more than 12% at the low point of the day to $421 on Thursday, slicing off more than $400 billion in market value.