TLDRs;
- Microsoft shares climb nearly 3% as Japan probes Azure contracts, boosting investor attention.
- Nasdaq rise fueled by tech momentum, with Nvidia earnings heightening market watchfulness.
- Microsoft strengthens AI and telecom partnerships, aiming to expand global cloud reach.
- Regulatory scrutiny and contract reviews remain key risks for long-term Azure growth.
Microsoft (NASDAQ:MSFT) shares rebounded on Wednesday, gaining 2.99% during regular trading to close at $400.63, before slightly dipping to $399.95 in after-hours trading.
Investors reacted to a mix of regulatory developments in Japan, broader tech market momentum, and the imminent release of Nvidia’s quarterly earnings, highlighting a cautious optimism surrounding the tech giant.
Japan Antitrust Raid Spurs Market Attention
Japan’s Fair Trade Commission conducted a raid on Microsoft Japan, investigating whether the company restricted Azure customers from using competing cloud services. Microsoft Japan confirmed it is “fully cooperating with the JFTC,” and the U.S. headquarters is expected to provide additional clarification.
The probe underscores the growing global regulatory scrutiny on cloud giants, particularly around contract terms, customer “lock-in” practices, and pricing strategies.
Azure remains central to Microsoft’s business, forming the backbone of its cloud services pitch to enterprises worldwide. Any required adjustments to contract structures or pricing could affect the company’s ability to compete aggressively with rivals in cloud computing, such as Amazon Web Services and Google Cloud.
Tech Rally Supports Microsoft Shares
Wednesday’s gains were bolstered by broader movements on Wall Street. The Nasdaq Composite rose 1.3% as tech investors were encouraged by Nvidia’s performance ahead of its earnings release. With Nvidia set to report after the bell, traders are closely watching the semiconductor and AI sectors, which tend to influence Microsoft and other large tech stocks.
The rebound comes after a challenging period for Microsoft. Shares are down nearly 28.5% from their October record close of $542.07 and have shed almost 20% in 2026 alone. Despite recent volatility, analysts note the stock remains near long-term technical support levels, suggesting potential for stabilization if earnings and regulatory outcomes remain favorable.
Global AI and Connectivity Moves
Microsoft is also driving momentum through strategic investments and partnerships. The company participated in a $1.2 billion funding round for British autonomous driving startup Wayve, which now carries an $8.6 billion valuation, alongside Nvidia’s participation. Additionally, during Mobile World Congress week, Microsoft announced new AI-driven telecom tools and a partnership with Starlink to enhance connectivity in remote regions.
The White House is set to meet with Microsoft, Meta, and Anthropic on March 4 to discuss a “Rate Payer Protection Pledge,” aimed at mitigating the electricity costs of AI data centers. Microsoft Vice Chair Brad Smith praised the initiative, emphasizing efforts to prevent data centers from driving higher consumer energy bills.
Regulatory and Market Risks Remain
Despite the optimism, caution persists. Should Japan’s investigation expand or lead to formal corrective measures, investor sentiment may be challenged. Regulatory attention to cloud licensing practices, contract flexibility, and AI infrastructure costs could influence Microsoft’s growth trajectory in both domestic and international markets.
As Nvidia reports earnings after Wednesday’s close, the results are expected to influence Microsoft’s share performance, with traders closely monitoring potential impacts on the AI trade. Analysts suggest that strong AI adoption and strategic cloud expansion may help offset regulatory pressures, positioning Microsoft for long-term growth in a highly competitive market.
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