By the numbers, the market answered fast. A new securities complaint says Microsoft’s stock fell more than $48 a share in a single day, from $481.63 to $433.50, after the company’s January 28, 2026 earnings report showed slower Azure growth and disclosed that just 15 million of its more than 450 million commercial users had paid for Microsoft 365 Copilot.
The lawsuit was filed June 12, 2026, in federal court in Seattle by the St. Clair Shores police and fire pension fund, which wants to represent every investor who purchased the shares from May 1, 2025 through January 28, 2026. The named defendants include Satya Nadella, the chief executive; Amy E. Hood, the chief financial officer; Jared Spataro, the chief marketing officer for AI at work; and Rajesh Jha, the executive vice president for experiences and devices.
The complaint quotes Nadella calling Copilot “best-in-class,” with more than 150 million monthly active users on the Copilot family of products. Spataro is quoted saying “70% of the Fortune 500 are using Copilot in a pretty extensive way.” The fund alleges that picture masked trouble: Copilot ran into “brand positioning, user experience, usage, data siloing, computational capacity, organizational, and interoperability problems,” and Microsoft’s flagship AI model “ranked well below competitors” on benchmarks.
For the quarter, capital spending hit $37.5 billion. The filing also points to insider selling, alleging Nadella sold Microsoft shares worth more than $75 million during the period, at prices above $500, sales it calls “suspicious.”
The fund alleges violations of the Securities Exchange Act of 1934, Sections 10(b) and 20(a), plus SEC rules Item 303 and Item 105, both under Regulation S-K, which oblige companies to disclose known trends and genuine risks. None of the allegations has been tested in court, and neither Microsoft nor the named executives has responded.
Sources
- Pension fund sues Microsoft, says it misled investors over Copilot AI – InvestmentNews
- Microsoft Faces Azure And Copilot Lawsuit As Copilot Adoption Grows
