Microsoft 365 Outage Enters Day Two as MSFT Stock Slides 2.77%

MSFT stock traded at $508.51 before the bell at 10:56 GMT on Friday, down 2.77% from Thursday's close, with a Microsoft 365 outage that began around 1 p.m. ET Thursday still unresolved. That leaves the shares just $3.51 above the $505 bear reference FinanceFeeds set when the stock closed at $545.18 on 9 November, per Yahoo Finance.

Outlook, Teams and Copilot failed for users in 74 countries, and Nasdaq-100 futures were flat over the same stretch — the pre-market drop is Microsoft-specific. A $14.49 drop across 7.43 billion shares equals about $107.6 billion of market value. Microsoft says it has no indication of malicious activity.

How bad is the outage?

Downdetector logged roughly 130,000 Outlook problem reports at the peak, with one tally reaching 138,058, CIO&Leader reported. Reports spread to 74 countries and territories within about an hour, according to The Next Web. Microsoft tracks the incident as EX1550543 for Exchange Online and MO1550821 for the wider suite, per SecurityWeek.

The blast radius reached governments and airlines alike. The Associated Press reported that Japan's government IT infrastructure was affected, Singapore's Government Technology Agency lost email, and the Philippine Supreme Court said its operations were hit. EV maker Workhorse postponed its earnings call. IndiGo and Air India rerouted customer email.

What does Microsoft say caused it?

Microsoft attributed the strain to "a number of servers being unexpectedly unavailable," with "a core process on affected servers" overwhelmed and "causing capacity loss," according to Outlook India. At 01:48 GMT it narrowed that to the process "responsible for establishing secure connections," ABC7 reported.

A recent network configuration change coincided with the start of the incident. Microsoft was reversing it to test whether it contributed. The company reported partial recovery at 04:36 GMT but said it had "not been sustained." A later post said its fixes were "not taking as expected," per AP.

Charles Lamanna, Microsoft's executive vice president for Copilot, Agents and Platform, wrote: "there is no indication this is the result of malicious or cyber activity." Microsoft has promised a post-incident report once service is restored.

Did the outage spread beyond Microsoft?

It did. Anthropic's status page flagged elevated errors on its Microsoft 365 connector at 17:52 UTC Thursday, and by 22:23 UTC it said the fault "is caused by a Microsoft 365 service incident" — mail, calendar and search tools failing for most requests, with Claude for Outlook also affected. OpenAI reported similar trouble connecting to Microsoft 365 tools, AP said.

Microsoft's own Copilot Chat and its access to work data were hit too. Microsoft said the outage affected Microsoft 365 offerings that interact with Exchange Online, and that mailbox layer is what both Copilot and the third-party connectors read from.

How did the stock trade through it?

Coverage split on Thursday's session, and the tape explains why. Shares stood at $528.53 just after 1 p.m. ET, slid to $520.87 by 3:15 p.m. — a 1.45% drop on Fiscal.ai intraday data — then recovered to close at $23.00 up 0.36%, at $523.00, on 18.6 million shares against a 10-day average of 33.1 million. The stock lost $7.66 in just over two hours once Outlook went dark.

Friday's slide came as Nasdaq-100 futures slipped just 0.03% at 10:57 GMT, a day after Nvidia said Jensen Huang had resigned as chief executive. Alphabet, whose Google Workspace competes with Microsoft 365, rose 0.98% pre-market. MSFT trailed the futures by 2.74 percentage points — a Microsoft-specific outage discount.

What's next for the shares?

The pre-market print sits below the $520.19 year-end bear case in FinanceFeeds' 24 October Microsoft stock prediction, and near the $504.96 intraday low from 2 November. At $508.51, MSFT is down 9.06% from its $559.15 high on 4 November, per TradingView.

Shareholders of record on 19 November receive the $0.98 quarterly dividend, payable 10 December, under Microsoft's 15 September declaration. The ex-dividend date is also 19 November, per Yahoo Finance.

The fundamentals were set before the outage: Microsoft Cloud revenue rose 30% to $63.9 billion in the September quarter, Azure grew 48%, and the company spent $41 billion on capex in the June quarter. MSFT is now pricing the outage before any root cause has been published — the post-incident report, ahead of the next earnings report expected around 27 January, is the disclosure that can confirm or reverse the discount.