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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.
Investors focused on the balance between AI spending and AI revenue wanted more juice from Microsoft’s cloud business in the latest quarter.

The company said on Wednesday that revenue in the most recent quarter was $81.3 billion, but its share price dropped more than 5 percent in after-hours trading.